Rates and bands for Scottish andWelsh taxpayers For 2021/22 the tax rates and bands applicable to Scottish taxpayers on non-savings and non-dividend income are as follows:
charges the first £2,000 of dividends to tax at 0%. Dividends received above this allowance are taxed at the rates shown in the table. Dividends within the DA still count towards an individual’s basic or higher rate band and so may affect the rate of tax payable on dividends above the £2,000 allowance. Dividends are treated as the top slice of income. So the basic rate tax band is first allocated against other income. Income tax is not the only means by which the government relieves us of our hard-earned cash. You may own assets such as a precious antique, a second home or shares. If such an asset is sold, the chances are that a profit will arise and this may give rise to a liability to capital gains tax (CGT). Details of any capital gains may have to be included on the self assessment return. Inheritance tax may be payable on the assets that you give to others in your lifetime or leave behind when you die. At one time very few individuals had to worry about this tax. House price increases have changed this and many more estates have now become liable, so you may need to consider some planning to minimise this tax. Many of those in business have to understand the principles of Value Added Tax (VAT) because they will have to act as an unpaid collector of this tax. In addition, those who run their business through a limited company need to know about corporation tax which taxes a company’s profits. Employing others in your business brings further obligations with
Real Time Information reporting for PAYE and auto enrolment pension contributions responsibilities. We consider these issues later in this guide. Practical Tip Remember to keep all tax related documents such as interest statements, dividend vouchers, pay certificate formP60 etc. Place everything in a folder through the year as it is received. Then you can simply hand this to us when we need to prepare your self assessment return. HMRC is increasingly emphasising the importance of good records. Failure to maintain adequate records may lead to inaccurate tax returns, which could result in penalties.
Scottish income tax band £ Band name
Rate %
0 - 2,097
Starter
19 20 21 41 46
2,098 - 12,726 12,727 - 31,092 31,093 - 150,000
Basic
Intermediate
Higher
Over 150,000
Top
For 2021/22 the Welsh rate of income tax is set at 10% and this is added to the UK rates, which are each reduced by 10%. For 2021/22, the overall tax payable by Welsh taxpayers continues to be the same as English and Northern Irish taxpayers. Scottish and Welsh taxpayers continue to pay tax on their savings and dividend income using the UK rates and bands. Other allowances Individuals may be entitled to the savings allowance (SA), with savings income within the SA taxed at 0%. The amount of SA depends on an individual’s marginal rate of tax. An individual taxed at the basic rate of tax has a SA of £1,000, whereas a higher rate taxpayer is entitled to an SA of £500. Additional rate taxpayers receive no SA. The dividend allowance (DA), available to all taxpayers regardless of their marginal tax rate,
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A Few Essentials
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