From 6 April 2019, people with a main residence in Wales and who pay income tax will pay Welsh rates of income tax. From April, the UK government will reduce the three rates of income tax paid by Welsh taxpayers, in line with the system in Scotland. As a result the basic rate drops from 20% to 10%; the higher rate from 40% to 30%; and the additional rate from 45% to 35%. The Welsh Government has committed not to increase income tax rates in Wales for the duration of the current Assembly (due to continue until May 2021) so Welsh tax payers will be paying the same rates as their counterparts’ resident in England and Northern Ireland.
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Scottish Budget supported by Green Party 5 February 2019
A deal has been reached between the Scottish National Party and the Scottish Green Party on all three parliamentary stages of the Scottish Budget, so it looks as though the income tax measures announced in December will be going ahead.
Finance Secretary Derek Mackay has reached an agreement with the Scottish Green Party to support the Scottish Budget at all parliamentary stages.
In letters exchanged on 31 January 2019, Mr Mackay outlined a package of reforms to local government.
Scottish rates and bands for 2019-20 The Scottish Budget (12 December 2018) announced the proposed income tax rates and bands for 2019-20 as per the table below. The personal allowance is determined by the UK government so will increase to £12,500. The starter rate and basic rate thresholds are to increase by inflation, but the higher rate threshold is to remain frozen at £43,430.
Bands
Band name
Rate
Over £12,500* - £14,549
Starter Rate
19%
Over £14,549 - £24,944
Scottish Basic Rate
20%
Over £24,944 - £43,430
Intermediate Rate
21%
Over £43,430 - £150,000** Higher Rate
41%
Above £150,000**
Top Rate
46%
* Assumes individuals are in receipt of the standard UK personal allowance. ** Those earning more than £100,000 will see their personal allowance reduced by £1 for every £2 earned over £100,000. The proposals are dependent on securing the support of the Scottish Greens on Stage 1, Stage 2 and Stage 3 of the Budget Bill, as well as support for the Local Government Finance Order, and ensuring that the Scottish Rate Resolution and Non-Domestic Rates orders pass successfully through parliament.
According to BBC News Finance Secretary Derek Mackay said he was "pleased to have reached an agreement" minutes before the Holyrood budget debate was due to begin.
The stage one vote passed by 67 votes to 58, with one MSP abstaining.
The deal struck with the Greens - the third in consecutive years - includes: • £90m for the core local government settlement
The Chartered Institute of Payroll Professionals
Payroll: need to know
cipp.org.uk
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