Tax information sheet

 April 2018

Fact sheet no. BDL38 SCOT Tax information sheet

This fact sheet tells you about the current tax rates and allowances. Use this fact sheet to find out about:
 

Information:

Scottish income tax 

This fact sheet is for Scottish taxpayers only.
  • personal allowances for income tax;
  • income tax rates and bands;
  • National Insurance contributions for sole traders;
  • National Insurance contributions for directors of limited companies and employees;
  • corporation tax; and
  • value added tax (VAT).

Income tax allowances

​Personal allowances
​2017/18
2018/19
​Personal allowance (1) ​£11,500 £11,850
​Income limit for personal allowance (2) £​100,000 ​£100,000
​Income limit for married couple's allowance (3) £28,000 ​£28,900
​Married couple's allowance (maximum amount) (4) £​8,445 ​£8,695
​Married couple's allowance (minimum amount) (5) £​3,260 ​£3,360
​Blind person's allowance £​2,320 £2,390​

Notes

(1) and (2) Since 2016/17 everyone is entitled to the same personal allowance and income limit, no matter when they were born.
 
(3) Where income is above £28,900, the allowance is reduced by £1 for every £2 above the limit. 
 
(4) and (5) The relief for married couple's allowance is given at 10%.
 

Income tax rates and bands

    2017/18​ 2018/19​
    ​Scottish starter rate 19% ​​- Personal allowance - £2,000
    ​Scottish basic rate 20% Personal allowance - £31,500​ ​£2,001 - £12,150
    ​Scottish intermediate rate 21% ​- £12,151 - £31,580​
    ​Scottish higher rate 41% £31,501 - £150,000​ ( 40% rate) £31,581 - £150,000​
    ​Scottish top rate 46% Over £150,000​ (45% rate) Over £150,000​
    • From 6 April 2017 the bands and rates for Scottish income tax are set by the Scottish Government. These differ from those set in England and Wales.
    • From 2018/19 the Scottish Government introduced the Scottish starter rate and Scottish intermediate rate.
    • Your personal allowance goes down by £1 for every £2 that your adjusted net income is above £100,000. This means your allowance is zero if your income is £123,700 or above for 2018/19.
    • From 2017/18 tax relief for finance costs for landlords of residential properties will be restricted to the basic rate only. See HM Revenue and Customs guidance on Changes to tax relief for residential landlords for more information.

    National Insurance contributions

    2017/18​ 2018/19​
    ​Class 2 £2.85pw​ £2.95pw​
    ​Class 2 - Small profits threshold £6,025pa​ £6,205pa​
    Class 4 - Lower profits limit​ £8,164pa​ £8,424pa​
    ​           - Upper profits limit £45,000pa​ £46,350pa​
    ​           - Rate between upper and lower profits limit 9%​ ​9%
    ​           - Rate above upper profits limit 2%​ 2%​

    Example calculation of estimated monthly income tax and National Insurance contributions 2018/19

    • If you are under retirement age and either a sole trader or a partner in a partnership, this example will help you work out the monthly income tax and National Insurance you should pay on your profit from your business.
    • You will then be able to work out your Available drawings from business. This will help you work out your household budget to show you what you have available to pay your creditors.
    • In this example, the figure worked out on the business budget sheet for Drawings (what your profit is before tax and National Insurance) is £3,950.
    • This example should not be used for income from residential properties. 

    Estimated monthly income tax

    ​1. ​Figure from Drawings box (top box on page 4 of Your business and household budget)sheet £3,950​ A​
    ​2. ​Multiply by 12 to get the annual figure ​£47,400 B​
    ​3. Tax allowance (refer to personal allowances​) ​£11,850 C​
    ​4. ​Taxable amount = B - C ​£35,550 D​
    ​5. ​First £2,000 of D multiplied by 19% ​£380 E​
    ​6. ​Next £10,150 of D multiplied by 20% ​£2,030 ​F
    ​7. ​Next £19,430 of D multiplied by 21% ​£4,080.30 ​G
    6.​ D - ​£31,580 (if answer is greater than 0) multiplied by 41% ​£1,627.70 H
    ​7. ​Estimated yearly tax liability = E + F + G + H ​£8,118 I​
    8.​ Estimated monthly tax liability = I divided by 12​ £676.50 J​
    Use J £676.50 as the Estimated tax figure on Your business and household budget sheet.

    Estimated National Insurance contributions

    Class 2 National Insurance contributions

    Use a flat-rate of £12.78 per month (£2.95 per week) as the National Insurance class 2 figure on Your business and household budget sheet.

    Class 4 National Insurance contributions

    ​1. ​Use Figure B from above (if figure is more than the maximum of £46,350 insert £46,350)  ​£46,350 K​
    ​2. K - £8,424​   £37,926 L
    ​3. Rate payable between upper and lower limits = L multiplied by 9% £3,413.24​ M
    ​4. Figure B from above minus £46,350 (if answer is less than 0 insert 0)​ £1,050 N
    ​5. Rate payable above upper limit = N multiplied by 2%​ ​£21.00 O
    ​6. Yearly class 4 contributions = M + O​ £3,434.34​ P
    ​7. Monthly class 4 contributions = P ​divided by 12 ​£286.20
    Q
    Use Q £286.20 as the National Insurance class 4 figure on Your business and household budget sheet.

    Corporation tax

    2017/18​ 2018/19​
    ​Main rate  19%​ 19%

     From 1 April 2015, there is a single corporation tax rate for non-ring fence profits.

    Value added tax (VAT)

    2017/18​ 2018/19​
    ​Standard rate 20%​ 20%​
    Reduced rate​ 5%​ ​5%
    Zero rate​ 0%​ 0%​
    Registration level​ £85,​000 £85,000
    ​De-registration level £83,000​ £83,000

    National Insurance contributions class 1

    ​Directors and employees 2017/18​ 2018/19​
    ​Lower earnings limit primary class 1 £113pw​ ​£116pw
    Upper earnings limit primary class 1​ £866pw​ £892pw​
    Primary threshold​ £157pw​ £162pw​
    Secondary threshold​ £157pw​ £162pw​

     

    ​Rates 2017/18​ ​2018/19
    ​Class 1 rate between primary threshold and upper earnings limit 12%​ 12%​
    Class 1 rate above upper earnings limit​ 2%​ ​2%
    Class 1A rate on employer provided benefits​ 13.8%​ 13.8%
    ​Employers' rates 2017/18​ 2018/19​
    Secondary class 1 rate above second threshold​ 13.8%​ 13.8%​