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Scottish government used income tax powers to create different rates between Scotland and the rest of the UK.
Holyrood finance secretary Derek Mackay announced that, for 2017-18, the Scottish government will freeze the basic and higher rates of income tax at 20% and 40% respectively. The higher rate threshold will rise in line with inflation to £43,430 – in the rest of the UK it will rise to £45,000. The additional rate will remain at 45%.
John Cullinane, Chartered Institute of Taxation tax policy director, said: ‘While the Scottish government has had income tax powers for some years, this will be the first time that they have used them to create different rates between Scotland and the rest of the UK.’
He added that, as well as Scottish employers, the change would affect those outside Scotland ‘looking to hire employees living in Scotland earning at or above the new Scottish higher rate threshold.’
