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EJ Summers – Winner of Scottish Young Accountant of the Year Award
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Income Tax Rates and Bands
Recent income tax rates and bands are as follows:
| 2021/22 | 2022/23 | 2023/24 | 2024/25 | |
| Savings rate: 0% | Up to £5,000 | Up to £5,000 | Up to £5,000 | Up to £5,000 |
| Dividend Allowance: 0% | Up to £2,000 | Up to £2,000 | Up to £1,000 | Up to £500 |
| Basic rate: 20% | Up to £37,700 | Up to £37,700 | Up to £37,700 | Up to £37,700 |
| Higher rate: 40% | £37,501 - £150,000 | £37,701 - £150,000 | £37,701 - £125,140 | £37,701 - £125,140 |
| Additional rate: 45% | Over £150,000 | Over £150,000 | Over £125,140 | Over £125,140 |
When the personal allowance (£12,570) is taken into account an individual will start to pay tax at 40% when their total income exceeds £50,270. This threshold (and the 45% threshold) can be increased if the taxpayer pays personal pension contributions or makes gift aid donations.
Scottish Income Tax Rates and Bands
Scottish income tax applies to non-savings and non-divdend income. Reforms to the Scottish tax system led to a new Advanced band of income tax coming into force from 6 April 2024, meaning the country moves further away from the set up in the rest of the UK.
The new rates and thresholds from April 2024 look like this.
| Tax rate | Income thresholds | |
| Personal allowance | 0% | Up to £12,570 |
| Starter Rate | 19% | £12,571 to £14,876 |
| Basic Rate | 20% | £14,877 to £26,561 |
| Intermediate Rate | 21% | £26,562 to £42,662 |
| Higher Rate | 42% | £43,663 to £75,000 |
| Advanced Rate | 45% | £75,001 to £125,140 |
| Top Rate | 48% | Over £125,140 |
This is how the rates and thresholds looked prior to the changes:
| 2020/21 | 2021/22 | 2022/23 | 2023/24 | |
| Starter rate: 19% | Up to £2,085 | Up to £2,097 | Up to £2,162 | Up to £2,162 |
| Basic rate: 20% | £2,086 to £12,658 | £2,098 to £12,726 | £2,163 to £13,118 | £2,163 to £13,118 |
| Intermediate rate: 21% | £12,659 to £30,930 | £12,727 to £31,092 | £13,119 to £31,092 | £13,119 to £31,092 |
| Higher rate: 42% | £30,931 to £150,000 | £31,093 to £150,000 | £31,093 to £150,000 | £31,093 to £125,140 |
| Additional rate: 46% (47% from 6 April 2023) | Over £150,000 | Over £150,000 | Over £150,000 | Over £125,140 |
