The Scottish Government’s tax changes came into effect on Thursday, with ministers claiming the move will raise £519 million in 2023-24.
“Changes to income tax in Scotland have come into force and are estimated to raise more than half a billion pounds of additional revenue this financial year to support vital public services,” said the Scottish Government.
The tax rates for earnings between £12,571 and £43,662 remain the same at between 19% and 21%, while earnings between £43,663 and £125,140 are now taxed at the higher tax rate of 42%.
The threshold at which people pay the top rate of tax has reduced from £150,000 to £125,140, with earnings over that threshold now taxed at 47%.
According to the Scottish Fiscal Commission, these changes will raise £129 million in 2023-24.
“The higher rate threshold will also remain at its 2022-23 level, applying to earnings over £43,662, which will increase revenue by a further £390 million when compared to uprating the threshold by inflation, according to Scottish Government estimates,” said the Scottish Government.
Deputy First Minister Shona Robison said: “The decisions we have made on income tax are fair and progressive by ensuring that those who can, contribute more.
“They strengthen our social contract with the people of Scotland who will continue to enjoy many benefits not available in the rest of the UK such as free prescriptions.
“The additional revenue will help us invest in our vital public services including the NHS, above and beyond the funding received from the UK Government.
“At the same time, the majority of taxpayers in Scotland will still be paying less income tax than if they lived in the rest of the UK.”