Scottish income tax and the Scottish rate resolution

The personal allowance

Some income is tax-free. The standard Personal Allowance is the amount of income you don’t have to pay tax on. The Personal Allowance remains reserved to the UK Government. 

Income tax in Scotland

The Scottish Parliament can set the rates and bands of non-savings, non-dividend income tax for Scottish taxpayers. This power was devolved in the Scotland Act 2016. However, income tax in Scotland continues to be collected and administered by HMRC.

Proposed Scottish income tax rates and bands are not part of the Budget Bill. They are set out by the Scottish Government in the Scottish rate resolution (SRR). This is separate from, but runs parallel to, the Budget Bill.

A Scottish Government motion on the SRR needs to be approved by Members of the Scottish Parliament (MSPs) in the Scottish Parliament Chamber before stage 3 of the Budget Bill. 

The Scottish Government announced the proposed income tax rates and bands for 2020-21 in February 2020. More information can be found on the Scottish Government website. The motion on the SRR to set income tax rates and bands for 2020-21 was debated and agreed to by the Scottish Parliament on 4 March 2020. As the resolution was passed, the agreed rates came into force in April 2020.


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