Income tax

The Scotland Act 2016 provided the Scottish Parliament with the power to set the rates and bands applying to all non-savings non-dividend (NSND) income tax paid by Scottish taxpayers from April 2017. 

NSND income accounts for about 90% of all income. NSND income is primarily from employment and pensions, and excludes income from savings and dividends.

The Scottish Parliament can:

  • Vary tax rates
  • Change the thresholds between tax bands
  • Change the total number of bands

The personal allowance, the amount of income after which you start paying income tax, remains reserved to the UK Government. Income tax continues to be administered by HMRC.

Latest forecasts

On 31 May 2018, we produced updated forecasts for Income Tax.

NSND income tax forecast – May 2018

£ million

 2017-18

2018-19

2019-20

2020-21

2021-22

2022-23

February 2018

 11,584

12,177

12,647

13,152

13,733

14,372

2016-17 outturn data

53 

78

80

84

87

92

Economy forecast

-198 

-317

-405

-474

-545

-614

2015-16 SPI data

-21 

 7

25

66

 96

 Tax-Motivated Incorporations

43 

26

 31

35

10

13

 Other*

8

 -1

0

1

-3

 2017-18 policy recosting

-2 

-2

-7

-7

-7

-8

 2018-19 policy recosting

 -6

 -8

 -9

 -11

 -12

 May 2018

 11,467

 11,969

 12,345

 12,805

 13,335

 13,936

 Change from February 2018

 -118

 -209

 -302

 -347

 -398

 -437

Source: Scottish Fiscal Commission (2018) Scotland’s Economic and Fiscal Forecasts May 2018

* Includes revisions to OBR triple lock and CPI forecasts, HMRC Gift Aid estimates, inclusion of 2017 mid-year population estimates and model developments.

Figures may not sum to totals because of rounding

Further information on 2015-16 and 2016-17 can be found in Table 3.5 in our May 2018 publication

 

Our report Scotland’s Economic and Fiscal Forecasts for May 2018 contains further information on the methodology used in our forecast.

Supporting information

Scottish Fiscal Commission (2018) Scotland's Economic and Fiscal Forecasts May 2018

Scottish Fiscal Commission (2018) How we forecast behavioural responses to income tax policy March 2018

Scottish Fiscal Commission (2018) Updated Income Tax Forecasts February 2018

Scottish Fiscal Commission (2017) Scotland’s Economic and Fiscal Forecasts December 2017

Scottish Fiscal Commission (2016) Current Approach to Forecasting

Scottish Government income tax page

UK Government income tax page

HMRC income tax statistics

OBR Scottish tax forecasts