New Scottish tax bands explained as high earners face 45 percent rate | Personal Finance | Finance

New Scottish tax bands have been released, which will see high earners north of the border charged on 45 percent of their income,

The new 45 percent band is set to be introduced in Scotland for those earning between £75,000 and £125,140. This will mean they will pay more tax than they currently are.

The highest earners, who earn more than £125,000 annually, will also see their tax rates increase from 47 percent to 48 percent.

The move was confirmed by Scottish Finance Secretary Shona Robinson as part of the government’s budget for 2024.

The alterations will see Scotland having six income tax bands – double that of the other nations in the UK.

The Scottish government predicts that around 114,000 people will now pay the new rate between £75,000 and £125,000. Meanwhile approximately 40,000 will pay the top rate of tax.

The amendments come as the Scottish government attempt to plug a £1.5billion shortfall in funds. This new measure, Ms Robinson claimed, would generate around £80million.

In delivering the changes, Ms Robinson also confirmed the thresholds for the higher and top bands, £43,663 and £125,140 respectively, would be frozen.

What are the new tax bands in Scotland?

• Starter rate (19 percent) £12,571 – £14,876
• Basic rate (20 percent) £14,877 – £26,561
• Intermediate rate (21 percent) £26,562 – £43,662
• Higher rate (42 percent) £43,663 – £75,000
• Advanced rate (45 percent) £75,001 – £125,140
• Top rate (48 percent) Above £125,140

Other moves confirmed by Ms Robinson included her government’s proposal to increase Scottish Child Payments to £26.70 from April 2024.

She also added that the government would provide £1.5million to local authorities in order to cancel school meal debt.

Ms Robinson said the government’s block grand funding had fallen by 1.2 percent in real-terms since 2022-23.

That amount is considered when the UK Government makes its own spending decisions.

She added to MSPs: “Devolution has brought many benefits, but it has also exposed quite how beholden we are to the decisions of Westminster.

“We are fighting Westminster austerity with one hand tied behind our back.”