Scottish Budget 2018/19

22nd December 2017 | Posted in: Business Tax, Government Announcements, Personal Tax, Properties, Property Investment scottish budget

Derek Mackay MSP, the Scottish Cabinet Secretary for Finance delivered the draft Scottish Budget for 2018/19 on 14 December 2017.   On 31 January 2018 he made a further announcement that, instead of the Higher rate threshold starting at £44,274, this would be reduced to £43,430. This change was made to ensure that the Scottish Greens voted with the SNP to pass the first stage of the necessary legislation.

The main budget proposals are now as follows:-

Personal Tax

  •  A new 19p starter rate
  • Freezing the basic rate band
  • A new intermediate rate of 21p to make the tax system more progressive
  • Increasing the higher rate and top rate of tax by 1p

The following table summarises these proposed changes compared with the rest of the UK:-

Gross income (£) Scotland

Scottish Income Tax Rate (SIRIT) (%) Gross income (£) Rest of UK Rest of the UK Income Tax Rate (%)
11,851 – 13,850 19 – Starter N/A N/A
13,851 – 24,000 20 – Basic 11,851 – 46,350 20 – Basic
24,001 – 43,430 21 – Intermediate N/A N/A
43,431 – 150,000 41 – Higher 46,351 – 150,000 40 – Higher
Above 150,000 46 – Top 150,001 + 45 – Top

Property

Following the changes announced in the UK budget in November 2016 for SDLT, Land and Buildings Transaction Tax (LBTT) relief will be introduced for first time buyers up to £175,000 of the property purchase price.

The current LBTT rates and bands are as follows:-

Purchase Price LBTT rate
Up to £145,000 0%
Above £145,000 to £250,000 2%
Above £250,000 to £325,000 5%
Above £325,000 to £750,000 10%
Over £750,000 12%

 

Business

  • Business rates increases will be capped at a maximum of 3%
  • Any increases in rates bills due to the improvement or expansion of existing properties will not take effect until 12 months after the changes to the property
  • There will be a new relief for day nurseries
  • There will be a move to three yearly revaluations from 2022 with valuations based on market conditions one year before
  • Rates relief will be removed from independent schools from 2020/21
  • No rates will be due on new build properties until they are occupied
  • Funding of £340m to establish the Scottish National Investment Bank
  • Funding of £600m over the next 4 years to provide superfast broadband

If you wish to discuss any of the above in more detail, please do not hesitate to contact us.

If you feel we could help you and would like to discuss any of the above, please contact Anne Melville BA CA on 0131 317 7377 or email to anne.melville@jsca.co.uk.
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