The Deputy First Minister, John Swinney, presented his Budget to the Parliament in Holyrood, announcing a variety of tax changes and spending plans.

In what he called the “most turbulent economic and financial context most people can remember”, he said an increase to the highest rates of income tax would generate £1 billion for health and social care.

So, what do you need to be aware of?

Income Tax

As of April 2023, the higher rate of income tax, for those earning £43,663 and above, will increase from its existing level of 41 per cent to 42 per cent.

The threshold for the 41p higher rate will remain frozen at £43,663.

Additionally, the top rate of income tax will rise from 46 per cent to 47 per cent. However, this will apply to income of over £125,140, as opposed to the current £150,000.

How will this affect your take-home pay?

If you are a higher earner, you will pay more income tax from 2023, causing a reduction in your regular take-home pay.

As seen below, those earning above a certain amount will be affected:

Annual income Reduction in take-home pay
£15,000 £0
£30,000 £0
£40,000 £0
£45,000 -£13
£50,000 -£63
£60,000 -£163
£100,000 -£563
£120,000 -£863
£150,000 -£2,432
£160,000 -£2,532


Other announcements made during the Scottish Budget include:

  • Councils will be able to raise council tax as they see fit
  • An extra £550 million will be provided for local Government
  • The Scottish Child Payment will stay at the increased level of £25 per child per week
  • Funding of £20 million, initially reserved for indyref2 on Scottish independence, will instead be used to support those at risk of fuel poverty.

Wondering how these announcements affect you? Contact us for advice.

Posted in Blog, Business Blog.