Minister for Public Finance and Digital Economy, Kate Forbes, delivered the 2020/21 Scottish Draft Budget on Thursday 6 February 2020, setting out the Scottish Government’s financial and tax plans.
The current Scottish income tax rates and bands for 2019/20 and the proposed rates and bands for 2020/21 on non-savings and non-dividend income are as follows:
| Scottish Bands 2019/20 | Scottish Bands 2020/21 | Band name | Rate |
|---|---|---|---|
| £12,501* – £14,549 | £12,501* – £14,585 | Starter | 19% |
| £14,550 – £24,944 | £14,586 – £25,158 | Scottish Basic | 20% |
| £24,945 – £43,430 | £25,159 – £43,430 | Intermediate | 21% |
| £43,431 – £150,000** | £43,431 – £150,000** | Higher | 41% |
| Above £150,000** | Above £150,000** | Top | 46% |
* assumes individuals are in receipt of the Standard UK Personal Allowance.
** the personal allowance will be reduced if an individual’s adjusted net income is above £100,000. The allowance is reduced by £1 for every £2 of income over £100,000.
In the 2018 Autumn Budget, the UK Government announced that the UK-wide personal allowance would be frozen at its current level of £12,500 in 2020/21. The UK higher rate tax point for 2020/21 is also expected to be frozen at the 2019/20 amount of £50,000 (for those entitled to the full UK personal allowance) and the tax rates for non-savings and non-dividend income are expected to be maintained at 20%, 40% and 45% respectively. The additional rate of 45% is payable on income over £150,000.
Land and Buildings Transaction Tax change to non-residential rates and bands
The Government announced the introduction of a new 2% band for non-residential leases which will come into effect for contracts entered into on or after 7 February 2020. The rates and bands for non-residential LBTT transactions are as follows:
| Non-residential transactions (purchase price) | Rate | Non-residential leases (net present value of rent payable) | Rate |
|---|---|---|---|
| Up to £150,000 | 0% | Up to £150,000 | 0% |
| £150,001 to £250,000 | 1% | £150,001 to £2 million | 1% |
| Over £250,000 | 5% | Over £2 million | 2% |
Internet link: GOV.SCOT Budget
