A personal allowance of £11,850
A new Starter Rate of 19% will be introduced for those earning between £11,850 and £13,850
A Basic Rate of income tax at 20% for those earning over £13,850
A new Intermediate Rate of 21% for those earning over £24,000
A Higher Rate of 41% on incomes over £44,273 to £150,000
A Top Rate of 46% on incomes over £150,000
Full details can be found here - https://news.gov.scot/news/most-taxpayers-to-pay-less-than-rest-of-uk
Gareth James, head of technical services at AJ Bell, comments:
“A six tier income tax regime certainly makes things more complicated for Scottish taxpayers. In relation to pensions, keeping the Scottish basic rate at 20% keeps things a lot simpler than they would have been if the basic rate had been changed.
“However, people in the other bands will see some changes. The 41% and 46% rates make pension contributions slightly more attractive for Scottish taxpayers than those in the rest of the UK because they will get more tax relief.
“Contributions paid to pensions by individuals will automatically receive tax relief at 20% and it seems unlikely that 19% taxpayers will have to repay the extra 1% that has been claimed.
“The biggest impact will potentially be for those in the 21% band, where we’d expect people to have the option of reclaiming the extra 1%, just like those in the higher and top rate bands. The Scottish Government says there are 898,000 people in the band so it potentially affects a significant number of people.
“The big question is, how difficult will this be and will people bother? Someone earning £30,000 and contributing 10% of their salary would pay in £2,400, get tax relief at source of £600 and can then reclaim an extra £30. They might feel it is not worth reclaiming the £30 but if they contribute to a pension for 40 years those £30 will add up. If they were invested somewhere else each year for that period it could be worth £3,805.”