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P9X: Tax codes to use from 6 April 2017 9 February 2017
The 2017-18 version of form P9X (English and Welsh) is now available for employers which confirms the tax codes to change and which to carry forward for the new tax year on 6 April.
Use form P9X to find out which PAYE tax codes to change, how to change them and which codes to carry forward ready for the new tax year.
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Scottish income tax higher rate threshold frozen 9 February 2017
The Scottish Government has changed their proposal for the higher rate threshold to increase in line with inflation and instead it will remain frozen for the 2017-18 tax year.
In December 2016 the Scottish Government published their draft finance Budget which proposed that the higher rate of income tax threshold would increase by inflation to £43,430 in 2017-18.
However in a recent announcement the Finance Secretary Derek Mackay confirmed that a revised higher threshold (to be frozen at the current £43,000 level) forms part of an agreement with the Scottish Green party that secures the passage of the Scottish budget and Local Government Settlement.
As per the table below the basic, higher and additional rates of income tax are proposed to stay the same as the rest of the UK (rUK).
Income tax rates
Scottish bands
rUK bands
Scottish Basic rate 20 per cent
Above £11,500* up to £43,000
Above £11,500* up to £45,000
Scottish Higher rate 40 per cent
Above £43,000 up to £150,000
Above £45,000 up to £150,000
Scottish Additional Rate 45 per cent
Above £150,000**
Above £150,000**
* Assumes person is in receipt of the Standard UK Personal Allowance ** Personal Allowance is reduced by £1 for every £2 earned over £100,000
Basic rate taxpayers who move into the higher rate band under the proposals for Scotland, but who would have remained basic rate taxpayers in the rest of the UK, will pay around £400 more tax and National Insurance (NI) per year in 2017-18, as will all existing higher and additional rate taxpayers. These individuals will pay a 52 per cent marginal rate on tax and NI on the £2,000 difference (40 per cent tax, 12 per cent NI). However the increase of £500 in the personal allowance to £11,500 will, in part, offset the increase in income tax between the basic and higher rate threshold.
The revised proposals are still subject to Scottish Parliamentary approval.
CIPP comment HMRC recently published the P9X , containing rates, thresholds and tax code increases required by employers and payroll providers, enabling them to prepare their payroll records and tax codes for the tax year commencing 6 April 2017.
The Scottish income tax rates and thresholds shown in the P9X were those announced in the Draft Scottish Budget in December.
The Chartered Institute of Payroll Professionals
Policy News Journal
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