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The Scottish Government has operated a different income tax regime compared to the rest of the UK since the 2018/19 tax year. This means anyone resident in Scotland pays different income tax rates, using more bands and thresholds compared to the rest of the UK.
The Scottish income tax rates, bands and thresholds for the 2020/21 tax year, and the previous tax year are shown below.
The Scottish Government operates a different income tax regime compared to the rest of the UK, with a lower starter rate and more tax bands and tax thresholds.
|2021/22 Tax Year||2020/21 Tax Year|
|Tax Band name||Tax Rate||Tax Bands and Thresholds|
|Starter rate||19%||£12,571* – £14,667||£12,501* – £14,585|
|Basic rate||20%||£14,668 – £25,296||£14,586 – £25,158|
|Intermediate||21%||£25,297 – £43,662||£25,159 – £43,430|
|Higher rate||41%||£43,663 – £150,000||£43,431 – £150,000|
|Additional rate||46%||Over £150,000||Over £150,000|
The above table assumes the individual is receiving the Personal Allowance for tax-free income of £12,570 in the 2021/22 tax year (£12,500 in the 2020/21 tax year). The Personal Allowance is reduced by £1 for every £2 earned over £100,000. This is the same as the rest of the UK.
HMRC will determine whether or not you’re a Scottish taxpayer based on your main place of residence. The Scottish rate of Income Tax is payable for the full year.
Anyone identified as a Scottish taxpayer will have an “S” prefix attached to their PAYE tax code.
Crunch clients who are resident in Scotland need to be aware of these changes so they can estimate their tax liabilities going forward.
If you are resident in Scotland, even for part of the year, please ensure Crunch and HMRC have been notified. This will ensure you are paying tax correctly.
If you have any questions, please contact your client managers.
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