Higher rate threshold frozen for Scottish taxpayers

After the Scottish National Party reached agreement with the Green Party on a budget for 2017/18, there will be no increase in the income tax higher rate threshold for Scottish taxpayers in April, the Scottish government announced.

The deal was agreed upon after opposition parties rejected the draft budget presented by Finance Secretary Derek Mackay in December. Mackay had proposed to increase the threshold by reference to inflation rather than implementing the real-terms increase scheduled for the rest of the U.K.

The decision means that some Scottish taxpayers will pay up to £400 more in income tax during tax year 2017/18 than taxpayers elsewhere in the U.K. on a similar income.

Read more: My news story for Tax Analysts, 4 February (paywall)