This article looks at the Scottish rates of income tax for the 2018/19 tax year.

For information regarding 2016/17 and 2017/18 and how to change the rate being applied to the tax calculation please click here

Scottish tax bands and rates

Although there was a small change between the UK and Scottish tax bands in 2017/18, it is 2018/19 that sees some significant changes. 

There are now five tax bands and five tax rates for Scottish non-savings income as follows:

UK tax bands and rates

The UK basic rate band has increased for 2018/19 but remain as three tax bands and rates as follows:

*Assumes person is in receipt of the Standard UK Personal Allowance

**Personal Allowance is reduced by £1 for every £2 earned over £100,000.

How does this affect a tax calculation?

As in 2017/18, only non-savings income will be subject to the Scottish rate bands and tax; savings and dividend income will still be subject to UK rates as in previous years so, when calculating the liability to income tax, consideration needs to be given to both UK and Scottish rates where there is savings and/or dividends and non-savings income.

The following example shows how the tax rates and bands interact with each other:

As seen in the above example, £1,070 of non-savings income is being taxed at the higher rate as only £31,580 is taxable at the lower rates of Scottish tax (£43,430 minus £11,850).

Some of the savings income is being taxed at the basic rate of UK tax as there is still £1,850 left of the UK basic rate band (£34,500 - £32,650).  The first £500 of this amount has been used by the personal savings allowance which leaves £1,350 to be taxed at the UK basic rate. 

The WhatIf Planner is now available for 2018/19 which incorporates the changes to all of the UK and Scottish tax bands and rates for the year (requires additional licence).