Income tax rates up as new financial year comes in
Swinney's tax changes have come into force today
As we usher in a new financial year, we have been met with a rise in taxes, as the Scottish Government’s long-awaited tax hikes have come into effect today.
With the beginning of the new financial year, the tax changes, which ministers have claimed would raise an extra half a billion pounds in 2023-24, laid out in the budget have come to fruition.
Announced by former deputy first minister John Swinney in December and passed by MSPs earlier this year, the changes will see both the higher and top rates of income tax increased by 1p, rising to 42p and 47p respectively.
While the threshold for the 42p tax rate will be frozen, the Scottish Government is proposing all Scots earning £125,140 a year or more will pay the very top rate of income tax.
The higher rate threshold will also remain at its 2022-23 level, applying to earnings over £43,662, which will increase revenue by a further £390m when compared to uprating the threshold by inflation, according to Scottish Government estimates.
Deputy First Minister Shona Robison said: “The decisions we have made on income tax are fair and progressive by ensuring that those who can, contribute more.
“They strengthen our social contract with the people of Scotland who will continue to enjoy many benefits not available in the rest of the UK such as free prescriptions.
“The additional revenue will help us invest in our vital public services including the NHS, above and beyond the funding received from the UK Government.
“At the same time, the majority of taxpayers in Scotland will still be paying less income tax than if they lived in the rest of the UK.
“Now that the new financial year has started, I’d also encourage people to check that the tax code is correct on the first payslip they get.
“If you think your tax code is wrong, you can check your details with HMRC who will be able to help.”
