Scottish income tax rates decision adds complexity to UK tax system

Keeping Scotland’s higher rate threshold for income tax at its current level will create complexity even though it will be the only point of divergence from the wider UK income tax system, the Chartered Institute of Taxation said after members of the Scottish Parliament approved revised proposals for tax year 2017/18.

“This is a historic day for Scotland – the first time ever that rates and bands of income tax are being set by the Scottish Parliament in line with Scotland’s needs and priorities,” Derek Mackay, Scotland’s cabinet secretary for finance and the constitution, said.

…Scottish taxpayers who receive income from personal savings or dividends face additional complexity, the CIOT said. Taxation of that income has not been devolved to Scotland, and the UK rates and thresholds will continue to apply.

Read more:

My news story for Tax Analysts, 23 February (paywall)

Scottish government’s announcement

CIOT press release