There was nothing to get particularly excited about in today's announcement from Public Finance Minister Kate Forbes. The Budget sets out the Scottish Government's plans for Income Tax in 2020-21, with an increase in the Basic and Intermediate Rate Thresholds in line with inflation and of freezing the Higher and Top Rate Thresholds in cash terms. No changes in rates are proposed, with the assumption being that with all thresholds rising in line with inflation (other than the Top Rate, which is frozen), this policy is forecast to raise an additional £51 million to be spent on public services and the economy. In more detail, here are the important stats...
Proposed Income Tax Rates and Bands:
2019-20 Over £12,500* - £14,549 19%
2020-21Over £12,500* - £14,585 19%
2019-20 Over £14,549 - £24,944 20%
2020-21 Over £14,585 - £25,158 20%
2019-20 Over £24,944 - £43,430 21%
2020-21 Over £25,158 - £43,430 21%
2019-20 Over £43,430 - £150,000 41%**
2020-21 Over £43,430 - £150,000** 41%
2019-20 Above £150,000**
2020-21 46% Above £150,000** 46%
*Assumes individuals are in receipt of the Standard UK Personal Allowance.
**Those earning more than £100,000 will see their Personal Allowance reduced by £1 for every £2 earned over £100,000.
We'll now see whether the SNP government can get this passed by the Scottish Parliament. As we noted in an earlier blog, there was the usual political manoeuvring with the other parties, with perhaps more debate than usual, so watch this space. We'll keep you informed on any developments and, of course, on the UK budget in March.
Stewart McKinnon, Director