Round Up Spring 2019

Proposed tax changes in Wales and Scotland Scotland For 2019/20, the Scottish government chose to move the income tax system further away from the rest of the UK by: • Increasing the starter (19%) and basic (20%) rate bands in line with inflation (2.5%), and • Freezing the higher rate threshold. Because of the increases to the first two Scottish tax bands and the rise in the personal allowance of £650 for 2019/20, this means the intermediate (21%) rate band shrinks by £945. The 2019/20 (and 2018/19) tax bands are as follows for income above the Personal Allowance (which is £12,500 in 2019/20).

Taxable income

Band name

Tax rate %

2018/2019

2019/2020

Starter

19

0-2,000

0-2,050

Basic

20

2,001 - 12,150

2,051 - 12,445

Intermediate

21

12,151 - 31,580

12,446 - 30,930

Higher

41

31,581 - 150,000*

30,931 - 150,000*

Top

46

Over 150,000*

Over 150,000*

* Those with more than £100,000 adjusted net income will see their Personal Allowance reduced by £1 for every £2 earned over £100,000. Remember that these tax rates and bands only apply to non-savings and non-dividend income such as earnings and pensions. For dividends and savings income, the rates/bands are the same as in the rest of the UK. Wales From 6 April 2019, the tax rate paid by Welsh taxpayers on non-savings and non-dividend income will be calculated by reducing the basic, higher and additional rates of income tax, levied by the UK government, by 10 pence in the pound and adding new Welsh rates proposed by the Welsh government and set by the National Assembly for Wales. The National Assembly for Wales has agreed to set each of these three rates at 10% for the tax year 2019/20, which means in the new tax year the tax rates and bands for Welsh taxpayers will be the same as in the rest of the UK (excluding Scotland).

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