Scottish Budget 2023/24
Scottish Budget 2023/24
John Swinney, Deputy First Minister of the Scottish Government delivered the draft Scottish Budget for 2023/24 on 15 December 2022. Although not yet passed by Holyrood, the expectation is that the measures announced will take effect in due course and we’re pleased to attach our brief summary for your information.
Income Tax
Given the limited powers held by the Scottish Government there are only certain areas where a different approach can be taken from the rest of the UK. The prime area being the income tax rates applicable to earned income (but not savings or dividend income) and as expected, the Scottish Government have followed the rest of the UK in reducing the threshold at which the top rate of tax applies from £150,000 to £125,140 whilst the other thresholds for lower rates of tax are maintained at current levels.
The Scottish Government have however taken a different approach in terms of tax rates and have opted to set out an increase to the higher and top rates of tax from April 2023. These will see the higher rate of tax increase from 41% to 42% and the top rate of tax from 46% to 47%.
|
Band |
Income range |
Rate |
|
Starter |
£12,571 - £14,732* |
19% |
|
Basic |
£14,733 - £25,688 |
20% |
|
Intermediate |
£25,689 - £43,662 |
21% |
|
Higher* |
£43,663 - £125,140 |
42% |
|
Top |
Above £125,140 |
47% |
*Assumes individuals are in receipt of the standard UK Personal Allowance. The Personal Allowance reduces by £1 for every £2 earned above £100,000.
Land & Buildings Transaction Tax
Moving on to Land and Buildings Transaction Tax, the residential rates and bands will remain unchanged for 2023/24 however those purchasing second homes or properties for investment will see the rate of the Additional Dwelling Supplement increase from 4% to 6%. This change was effective from 16th December 2022 so purchasers of second properties will see an immediate increase in the transaction costs for any purchases in the pipeline.
Other measures
- Scottish Landfill Tax - There has also been an increase in the rate of landfill tax paid when waste is disposed of to landfill to £102.10 per tonne (standard) and £3.25 per tonne (lower rate) from 1 April 2023
- Airport Departure Tax – The government has reaffirmed it’s commitment to introduce a Scottish Airport Departure Tax as a direct replacement for Airport Passenger Duty but this remains on hold until a solution to the Highlands and Islands exemption issue has been found
