New Scottish Income Tax Rates

On 14th December 2017 the Scottish Government published its proposals for income tax rates and bands for 2018/19. The new rate structure will result in Scottish families paying less than similar families in the rest of the United Kingdom but they will still be paying more than comparable families in other countries. Families entitled to Universal Benefit gain less as the increase in income that results in the cut in income tax reduces Universal Credit.

The Scottish Government has published it proposals for income tax rates and bands in 2018/19. The new rates and bands are set out below:


Band name                                 Band                                               Rate        

Starter rate                                  Over £11,850-£13,850                    19%

Basic Rate                                   Over £13,850-£24,000                   20%

Intermediate Rate                       Over £24,000-£44,273                  21%

Higher Rate                                 Over £44,273-£150,000                 41%

Top Rate                                       Over £150,000                                46%


The tax threshold set by the UK Parliament is to increase from £11,500 to £11,850.

Families currently paying basic rate tax (families with incomes  below £44,000) will find that their income tax bill is slightly lower than in 2017/18. Families currently liable to higher rate tax will pay more. Families paying less income tax are still likely to be paying more than comparable families in other OECD countries (see international comparisons page). Those entitled to Universal Credit will benefit less as their higher net of tax income will reduce Universal Credit. This will also be the case for families claiming Housing Benefit.

The table below compares the tax payable in 2017/18 and 2018/19 both single parent and couple households. To enable international comparisons to be made the first thee income points are 50%, 75% and 100% of the average wage as calculated by OECD for 2016/17.


Family Type          £18,285     £27,428     £36,571    £44,000     £50,000                                    

2017/18

Single parent       £1,357        £3,186        £5,014      £6,700        £10,700

Couple family[1]  £1,127        £2,956        £4,784     £6,700        £10,700


 2018/19

 Single Parent         £1,223         £2,960           £4,731       £6.702      £10,801

 Couple Family       £ 985           £2,722           £4,493       £6,702     £10,801


 Income tax change

 Single Parent         - £134         -£226            -£283         +£2          +£102

 Couple Family       -£142          -£234            -£291          +£2         +£102


 Gain if Universal Credit  or Housing Benefit applies

 Single Parent       £47             £79                £99

 Couple Family     £50             £82               £102

[1] One earner marriage allowance claimed where appropriate.

Don Draper