Scotland uses tax to support public services

Higher earners in Scotland are being asked to pay more tax to help increase patient care in the NHS.

Deputy First Minster John Swinney announced in his latest budget that all those earning over £43,662 will now pay income tax of 42p in the pound. The top rate of tax is also increasing to 47p, and the tax threshold has been lowered from £150,000 to £125,140 (see table below).

Some 500,000 Scots are in the higher rate bracket, with a further 33,000 paying the top rate of tax. Those earning £50,000 in Scotland will now pay £1,552 more per year in income tax than someone on the same money elsewhere in the UK. Anyone earning £150,000 north of the border will be paying £3,857 more tax than those in the south.

The Scottish Income Tax bands and rates proposed in the 2023-24 Budget are:

BandBand nameRate
£12,571* – £14,732Starter Rate19%
£14,733 – £25,688Basic Rate20%
£25,689 – £43,662Intermediate Rate21%
£43,663 – £125,140**Higher Rate42%
Over £125,140Top Rate47%

* Assumes individuals are in receipt of the standard Personal Allowance.

** Those earning more than £100,000 will see their Personal Allowance reduced by £1 for every £2 earned over £100,000.

The increase in the Land and Buildings Transaction Tax Additional Dwelling Supplement will take effect from 16 December 2022. The increase will not apply to any transaction where the contract was entered into before that date.

The standard and lower rates of the Scottish Landfill Tax will increase:

  • From £98.60 to £102.10 per tonne (standard rate) from 1 April 2023.
  • From £3.15 to £3.25 per tonne (lower rate) from 1 April 2023.