Higher-rate tax cut takes effect for most

Higher earners in England, Northern Ireland and Wales will pay considerably less income tax in 2019/20 than their counterparts in Scotland.

Chancellor Philip Hammond's decision to raise the higher-rate threshold to £50,000 took effect on 6 April 2019, while the higher rate in Scotland remains at £43,430.

This means people in Scotland start paying higher-rate income tax on earnings £6,570 sooner than their counterparts down south.

Many of those also pay income tax at higher percentage rates, which for earnings above £43,430 is 41% - 1% higher than taxpayers in the rest of the UK.

With the higher-rate tax rate at 40% in the rest of the UK, someone earning £50,000 in England, Northern Ireland or Wales would pay £7,500 in income tax, compared to £9,044 in Scotland.

Steve Cameron, pensions director at Aegon, said:

"From 6 April 2019, many people living in Scotland will be paying substantially more income tax than someone on equal earnings in the rest of the UK.

"People in Scotland start paying higher-rate tax on earnings £6,570 sooner than their counterparts elsewhere in the UK.

"Many also pay income tax at higher percentage rates, which for earning above £43,430 in Scotland is 41%."

Talk to us for tax planning advice.

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