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Glasgow
+44 (0)141 221 2984

Edinburgh
+44 (0)131 225 6366

Stirling
+44 (0)1786 451745

Dumbarton
+44 (0)1389 765238

Hamilton
+44 (0)1698 459444

French Duncan

DECEMBER 2016 - Scotland's 2017/18 Budget

The 15 December 2016 proposals covered a number of taxes but those of most interest to the Scotsman in the street is Income Tax and, to a lesser extent, Land and Buildings Transaction Tax.

The good news on Income Tax is that the rates are to remain the same as in England. Those with income under £100,000 are entitled to a personal allowance of £11,500 from 6 April 2017 but this is reduced by £1 for every £2 of income above this level. 

The income tax basic rate band will be £31,930 so income after utilising your personal allowance will be taxed at 20% within this band. Once your total income exceeds £43,430, being the personal allowance plus the basic rate band, higher rate tax will be charged at 40%. When your income exceeds £150,000 the additional rate above this is 45%. 

With rates remaining the same as at present, the next question is how does the man in Gretna fare against the man in Carlisle?   Whereas higher rate tax in Scotland will kick in once your income exceeds £43,430, if you live South of the border then the 40% rate will commence at £45,000, a saving of £314 per annum.

Good news, if you can call paying tax good, is that the residential and non-residential rates and rate bands of Land and Buildings Transaction Tax are to remain at their current levels.

It is proposed to increase standard rate of Scottish landfill tax to £86.10 per tonne and the lower rate Scottish landfill tax to £2.70 per tonne which is in line with the increase in the retail price index and with landfill tax in the rest of the UK. 

It is proposed that a Scottish replacement for air passenger duty will be introduced with effect from 1 April 2018 and the aim is to deliver a 50% reduction in the overall tax burden by the end of the current parliament. 

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