The Scottish Government has decided to freeze all income tax rates, plus the higher and top-rate thresholds, for 2020/21.
Assuming the personal allowance remains at £12,500, only the basic and intermediate thresholds in Scotland are set to rise in line with inflation.
A starter-rate of 19% will apply on earnings between £12,501 and £14,585, while the basic-rate of 20% will then be paid on earnings up to £25,158.
An intermediate-rate of 21% will then apply up to £43,430, with a higher-rate of 41% kicking in on earnings up to £150,000.
Scotland’s top-rate of 46% then applies to those earning more than £150,000 in 2020/21.
Scotland’s public finance minister Kate Forbes stepped into the breach to deliver the speech, following the shock resignation of Finance Secretary Derek Mackay.
Forbes said:
“More than half of taxpayers pay less income tax in Scotland than elsewhere in the UK.
“Based on commitments made by the UK Government in their Autumn Budget 2018, we do not expect any further increase in income tax divergence between Scotland and the rest of the UK this year.
“It is now up to the UK Government to ensure that divergence does not increase when they deliver their Budget on 11 March.”
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