Here are the Scottish income tax bands and thresholds for the tax year 2023-24 which affect individuals resident in Scotland.
Friendly Disclaimer: Whilst I am an accountant, I’m not your accountant. The information in this article is legally correct but it is for guidance and information purposes only. Everyone’s situation is different and unique so you’ll need to use your own best judgement when applying the advice that I give to your situation. If you are unsure or have a question be sure to contact a qualified professional because mistakes can result in penalties.
What are the Income Tax Bands in Scotland for 2023-24 Tax Year?
The Scottish income tax brackets for the tax year 2023-24 are:
- 0%: £0 to £12,570 (personal allowance)
- 19%: £12,571 to £14,732 (starter rate)
- 20%: £14,733 to £25,688 (basic rate)
- 21%: £25,689 to £43,662 (intermediate rate)
- 42%: £43,663 to £100,000 (higher rate)
- 63%: £100,001 to £125,140 (higher rate + personal allowance restriction)
- 47%: Over £125,141 (top rate)
The tax year for 2023-24 runs from 6 April 2023 to 5 April 2024
Here’s an example:
Raymond pays Scottish Income Tax. In the tax year 2023-24, he earns £70,000 as a sole trader. He will pay income tax in Scotland of £17,439 which is made up of:
- On the first £12,570 0% = £0
- On the next £2,161 19% = £411
- On the next £10,955 20% = £2,191
- On the next £17,973 21% = £3,774
- On the final £26,341 42% = £11,063
As a sole trader, Raymond will also need to pay class 1 and class 2 national insurance under the rules of self-employment tax.
DID YOU KNOW
Scottish income tax is collected by HMRC and then remitted to the Scottish government.
Scottish Tax Codes
If you are employed by someone you will be assigned a tax code which tells your employer how much income tax to deduct from your pay and how much personal allowance you’re entitled to.
Scottish tax codes begin with S to indicate that salaries should be taxed in accordance with the Scottish income tax brackets because the individual lives in Scotland. For example, the standard Scottish tax code for 2023-24 would be S1257L.
Read this guide to learn more about the standard tax code for 2023-24 of 1257L and what to check if you’ve not been assigned it.