Below we summarise the main tax outcomes from the Scottish Budget on 9th December 2021 - if you have any queries about any of the announcements please do get in touch.
Income Tax Rates and Thresholds:
For the 2022/23 tax year, the Income Tax rates and bands for the non-savings, non-dividend income of Scottish taxpayers will rise by 3.1% at the 19% and 20% bandings in line with CPI. However, the Scottish Income Tax rates will remain unchanged for this tax year. The starting band for the 41% and 46% thresholds will remain frozen at £43,662 and £150,000, respectively.
The position can be summarised as follows:
Land and Buildings Transaction Tax (LBTT):
- For the 2022/23 tax year, LBTT rates and bands will remain unchanged for both residential and non-residential properties.
- The Additional Dwellings Supplement (ADS), which applies on the purchase of relevant residential properties above £40,000, will remain fixed at a rate of 4%. However, the Scottish Parliament intend to carry out a call for evidence during 2022 which will focus on the operation of the ADS so there may be a reform of how it works but it has been made clear that this will not be reviewing if it should be withdrawn or whether the rate should it be changed.
Council Tax changes may be coming:
- Whilst rates were frozen for 2021-22, Council will have the ability to change Council Tax rates for 2022-23.
Additional Dwelling Supplement (ADS) to be reviewed:
- Scottish Government will request evidence to potentially review this - but don't expect it be scrapped, as could be more to do with how it's implemented.
Scottish Landfill Tax increases:
- The standard rate of this is to increase to £98.60 per tonne, and the lower rate to £3.15 per tonne, in 2022-23 which keeps them in-line with the Landfill Tax charges in the rest of the UK.