SMEs should mind the gap following Scottish Budget announcement
Posted on December 17, 2018 by Wylie & Bisset
The Tax Gap continues
Wylie & Bisset, the leading Glasgow-based chartered accountants with a national reach, is expecting taxpayers to look closely at the tax gap impact on their finances in the wake of Finance Secretary Derek Mackay’s latest Scottish Budget.
Yesterday’s Budget revealed that income tax rates will remain the same as last year, with the higher rate threshold being frozen while the starter and lower rate threshold will be increased by inflation. Good news for those on lower incomes but higher rate taxpayers need to watch out.
The proposed new income tax bands in Scotland for 2019/20 are:
|Over £12,500-£14,549||Starter Rate||19%|
|Over £14,549-£24,944||Scottish Basic Rate||20%|
|Over £24,944-£43,430||Intermediate Rate||21%|
|Over £43,430-£150,000||Higher Rate||41%|
|Above £150,000||Top Rate||46%|
This freezing of the higher rate threshold only serves to widen the potential gap in the differing amounts of income tax paid north and south of the Scottish border. Philip Hammond’s October Budget announced that he plans to raise the threshold at which 40% tax is levied for those south of the border to £50,000 from 2019/20.
Catherine McManus, Head of Tax at Wylie & Bisset, said: “It will not be a surprise to many that there has been a tax impact from the application of the Scottish Government’s devolved powers on taxation. Taxpayers should review what the above rates and thresholds mean to them. We will have to see how these changes affect the Scottish SME market and their efforts to retain their workforce in Scotland”
Wylie & Bisset urges Scottish taxpayers to seek professional advice on their tax affairs for further clarification.
For further information please contact Catherine McManus on 0141 566 7000
Issued on behalf of Wylie & Bisset by Liquorice Media tel 01877 382961 www.liquorice-media.com
Date: 13 December 2018