27 02 2017

Scottish Parliament Agrees New Income Tax Settings

Scottish lawmakers have approved plans for the structure of the nation's new individual income tax regime, following the tax devolution agreement with the UK.

"This is a historic day for Scotland – the first time ever that rates and bands of income tax are being set by the Scottish Parliament in line with Scotland's needs and priorities," said Finance Secretary Derek Mackay. "But the passing of the Scottish Rate Resolution is much more about our future than it is about our history."

Earlier this month, the Scottish Government dropped plans to increase the higher rate threshold in line with inflation under a deal with the Scottish Green Party to secure approval for its Budget in Parliament. The threshold for the higher rate of income tax will remain the same at GBP43,000 (USD53,706) from April 6, 2017. The threshold was due to rise to GBP43,430 from April 2017.

The current 20 percent, 40 percent, and 45 percent rates will remain unchanged.