A brief look at the proposed Scottish Incomes Tax Rates for 2023/24, to take effect from 6 April 2023, and what this means for Scottish based employees.

The 2023-24 tax year Scottish Budget took place on 15 December 2022, and the following proposal for Scottish Income Tax rates has been announced to take effect from 6 April 2023. This means that additional costs will need to be budgeted for Scottish based employees, not only from the reward perspective (e.g. salary) but also from a compliance perspective, because your PAYE Settlement Agreement includes Scottish employees.

Tax Rates Remaining as 2022/23

• For 2023-24, the Personal Allowance will continue as its current level of £12,570.
• There will be no changes to the Starter, Basic and Intermediate earnings bands, or tax rates.

Higher and Additional Income Tax Rates and Bands for 2023/24

• For 2023-24, the Higher Rate earnings band will remain the same at £43,663. However, there will be an increase in the tax rate from 41% to 42%.
• The additional tax rate earnings band will be reduced from £150,000 to £125,140. Furthermore, there will be an increase in the tax rate from 46% to 47%.

Summary of Proposed Tax Rates

The above table assumes individuals are in receipt of the standard UK Personal Income Tax Allowance (‘Personal allowance’).

Please note that those earning more than £100,000 will see their Personal Allowance reduced by £1 for every £2 earned over £100,000.

If you have any questions, please contact a member on the Employment Tax team at EmploymentTax@haysmacintyre.com.