Tax benefit

Scots earning up to £112,900 better off after NI cut

Pay-wage-slip
Scots earning up to six figure salaries will better off

Scots earning up to £112,900 a year will enjoy an increase in their take home pay from this weekend despite a rise in Scottish income tax.

This is a result of the UK government’s decision to reduce the main Class 1 National Insurance rate paid by employees to 8%.

It will offset to some degree the introduction of a new 45% tax rate on earnings between £75,000 and £125,140, as well as an increase in the top rate of tax to 48%. Taken together they will result in further income tax divergence for higher-earning Scots compared to their English counterparts.

Scottish taxpayers earning above £28,867 will pay more income tax than someone with the same earnings elsewhere in the UK. This is up from £27,850 and is due to changes in starter and basic rate bands in line with inflation. Those below this level will pay less tax than those elsewhere in the UK.

Sean Cockburn, chair of the CIOT’s Scottish Technical Committee, said: “Although the Scottish Government’s tax choices will result in higher earning Scots paying more income tax from this month, these have been somewhat offset by the UK-wide National Insurance changes.

“It means that while Scots with earnings above £75,000 will pay more in income tax, those with earnings under £112,900 will actually end up paying less in tax and national insurance overall compared with the year just past.

“It illustrates what can happen when Scottish and UK tax choices interact with one another.”

The first two columns in the table below show the income tax and National Insurance liabilities for taxpayers in Scotland and the rest of the UK in 2024/25.

The third shows the difference in the tax liabilities of Scottish and UK taxpayers in the coming year and the final column, the difference for Scottish taxpayers compared to the 2023/24 tax year.

A negative figure means less tax paid and a positive figure, more tax paid.

2024/252024/25DifferenceDifference
EarningsScotlandIncome Tax & Class 1 NIC liabilityrUKIncome Tax & Class 1 NIC liabilityScotland v rUK in 2024/25Scotland 2023/24 v Scotland 2024/25
££ ££
10,0000000
15,000657680-23-86
20,0002,0572,080-23-261
25,0003,4573,480-23-436
28,8674,5634,5630-581
35,0006,3426,280+61-795
40,0007,7927,680+111-970
45,0009,5239,080+442-1,145
50,00012,02310,480+1,542-1,320
55,00014,23912,543+1,696-1,330
60,00016,43914,643+1,796-1,330
65,00018,63916,743+1,896-1,330
70,00020,83918,843+1,996-1,330
75,00023,03920,943+2,096-1,330
80,00025,38923,043+2,346-1,180
85,00027,73925,143+2,596-1,030
90,00030,08927,243+2,846-880
95,00032,43929,343+3,096-730
100,00034,78931,443+3,346-580
125,14052,26147,029+5,232+552
150,00064,69158,714+5,978+800
175,00077,19170,464+6,728+1,050
200,00089,69182,214+7,478+1,300
250,000114,691105,714+8,978+1,800
300,000139,691129,214+10,478+2,300
500,000239,691223,214+16,478+4,300
1,000,000489,691458,214+31,478+9,300


Leave a Reply

Your email address will not be published. Required fields are marked as *

This site uses Akismet to reduce spam. Learn how your comment data is processed.