More than two months have passed since Finance Secretary Kate Forbes made her most recent Budget speech to Holyrood.
It marked new territory for the SNP Government, following their coalition with the Green Party, and the election promises made last year.
Chancellor Rishi Sunak boosted Scotland’s budget by £4.6 billion when delivering his Budget speech last October.
Having had time to digest what was said in our equivalent fiscal event, here are the key points from the Finance Secretary’s second speech.
The following tax policies will be in place for the 2022/23 tax year, which starts on 6 April 2022.
Income tax in Scotland in 2022/23
Much like down south in Westminster, Holyrood decided to retain the existing income tax rates.
The thresholds at which those tax rates are paid will, however, rise for low earners who fall into the starter and basic-rate bands.
Using that magic figure from last September’s rate of inflation, as measured by the Consumer Prices Index, those thresholds will rise by 3.1%.
The higher-rate threshold in 2022/23 remains at 41% for earnings between £43,662 and £150,000, while the top-rate (46%) threshold stays at £150,000.
Every individual in Scotland can earn up to £12,570 without paying the starter-rate of income tax in 2022/23.
Non-domestic rates for businesses
Retail, hospitality, leisure and aviation sectors in Scotland have had 100% non-domestic rates relief throughout the current tax year.
In comparison, similar pandemic-related support for these sectors came to an end for businesses in England last July.
Businesses operating in these sectors will get 50% in rates relief up to a cap of £27,500 per ratepayer until 30 June 2022.
All the other existing non-COVID-19 non-domestic rates reliefs will be maintained throughout 2022/23.
The non-domestic rate for basic premises with rateable values of less than £51,000 will be 49.8p – a below-inflation rise.
The intermediate and higher rates for non-domestic properties will increase to 51.1p and 52.4p, respectively.
Council tax & others
With non-domestic rates applying to bricks-and-mortar premises in Scotland, council tax applies to residential properties.
The current freeze on council tax rises comes to an end next month, after which councils will have free reign to set their own rates for 2022/23.
With soaring inflation and the living-costs crisis continuing to reign supreme, this could be a cause for concern among homeowners.
After land and transaction tax returned to normal this year, the same rates and bands will be maintained from April 2022.
Personal tax planning
At Thomas Barrie & Company, we can make sure you don’t pay more tax than you need to in 2022/23 through our personal tax planning service.
With the complex nature of tax and finances today, we can also help you come up with a personal finance plan for the upcoming tax year.
To find out more about what our expert team can offer, email us at contact@thomasbarrie.co.uk or call us on 0141 221 257.