In December 2017, Scotland’s Finance Secretary introduced the proposed Scottish draft budget for 2018/19, which included further divergence on income tax rates and bands from the remainder of the UK. In 2017/18 the Scottish income tax regime also differed to the UK regime – the higher rate band which commenced at £45,000 in the UK began at £43,500 in Scotland.

A new 19 percent “starter rate” and a 21 percent “intermediate rate” of income tax was announced, alongside the more widely forecast 1 percent increases in the higher and additional rates to 41 percent and 46 percent respectively.

Readers are reminded that the Scottish Government is a minority administration and will need support from opposition parties to pass this budget. At the time of writing, the budget had not been passed.

The December 2017 Pension schemes relief at source for Scottish Income Tax newsletter has also been published.