Income tax and NI for Scottish taxpayer
Discussion
Morning all,
I am resident in Scotland and a higher rate tax payer. Following the Scottish budget last December I’m trying to work out how much more tax I pay in Scotland compared to someone earning a similar salary in other parts of the UK. Can anyone recommend any online tax calculators for the current financial year?
I also have a question about NI contributions. My understanding is that the UK Government has set the drop in NI contributions from 12% to 2% at the higher rate income tax threshold for the UK (Now £50,000). Because the higher rate tax threshold in Scotland is now much lower than in the rest of the UK does that mean that a higher rate taxpayer in Scotland has an effective tax rate of 53% (41% income tax + 12% NI contributions) between the UK and Scottish thresholds?
Thanks in advance.
I am resident in Scotland and a higher rate tax payer. Following the Scottish budget last December I’m trying to work out how much more tax I pay in Scotland compared to someone earning a similar salary in other parts of the UK. Can anyone recommend any online tax calculators for the current financial year?
I also have a question about NI contributions. My understanding is that the UK Government has set the drop in NI contributions from 12% to 2% at the higher rate income tax threshold for the UK (Now £50,000). Because the higher rate tax threshold in Scotland is now much lower than in the rest of the UK does that mean that a higher rate taxpayer in Scotland has an effective tax rate of 53% (41% income tax + 12% NI contributions) between the UK and Scottish thresholds?
Thanks in advance.
Ecosseven said:
Morning all,
I am resident in Scotland and a higher rate tax payer. Following the Scottish budget last December I’m trying to work out how much more tax I pay in Scotland compared to someone earning a similar salary in other parts of the UK. Can anyone recommend any online tax calculators for the current financial year?
I also have a question about NI contributions. My understanding is that the UK Government has set the drop in NI contributions from 12% to 2% at the higher rate income tax threshold for the UK (Now £50,000). Because the higher rate tax threshold in Scotland is now much lower than in the rest of the UK does that mean that a higher rate taxpayer in Scotland has an effective tax rate of 53% (41% income tax + 12% NI contributions) between the UK and Scottish thresholds?
Thanks in advance.
Not quite, you would still be paying 2% in England so it’s a marginal rate of 51% in Scotland (41+10) as I understand it.I am resident in Scotland and a higher rate tax payer. Following the Scottish budget last December I’m trying to work out how much more tax I pay in Scotland compared to someone earning a similar salary in other parts of the UK. Can anyone recommend any online tax calculators for the current financial year?
I also have a question about NI contributions. My understanding is that the UK Government has set the drop in NI contributions from 12% to 2% at the higher rate income tax threshold for the UK (Now £50,000). Because the higher rate tax threshold in Scotland is now much lower than in the rest of the UK does that mean that a higher rate taxpayer in Scotland has an effective tax rate of 53% (41% income tax + 12% NI contributions) between the UK and Scottish thresholds?
Thanks in advance.
I’ve upped my pension salary sacrifice to keep myself under the (Scottish) higher rate threshold, can’t help but wonder just how many people did the same.
emicen said:
Ecosseven said:
Morning all,
I am resident in Scotland and a higher rate tax payer. Following the Scottish budget last December I’m trying to work out how much more tax I pay in Scotland compared to someone earning a similar salary in other parts of the UK. Can anyone recommend any online tax calculators for the current financial year?
I also have a question about NI contributions. My understanding is that the UK Government has set the drop in NI contributions from 12% to 2% at the higher rate income tax threshold for the UK (Now £50,000). Because the higher rate tax threshold in Scotland is now much lower than in the rest of the UK does that mean that a higher rate taxpayer in Scotland has an effective tax rate of 53% (41% income tax + 12% NI contributions) between the UK and Scottish thresholds?
Thanks in advance.
Not quite, you would still be paying 2% in England so it’s a marginal rate of 51% in Scotland (41+10) as I understand it.I am resident in Scotland and a higher rate tax payer. Following the Scottish budget last December I’m trying to work out how much more tax I pay in Scotland compared to someone earning a similar salary in other parts of the UK. Can anyone recommend any online tax calculators for the current financial year?
I also have a question about NI contributions. My understanding is that the UK Government has set the drop in NI contributions from 12% to 2% at the higher rate income tax threshold for the UK (Now £50,000). Because the higher rate tax threshold in Scotland is now much lower than in the rest of the UK does that mean that a higher rate taxpayer in Scotland has an effective tax rate of 53% (41% income tax + 12% NI contributions) between the UK and Scottish thresholds?
Thanks in advance.
I’ve upped my pension salary sacrifice to keep myself under the (Scottish) higher rate threshold, can’t help but wonder just how many people did the same.
rossub said:
I also wonder how many higher rate taxpayers will be voting SNP next time around.... only the diehard, braveheart nutters I imagine and I doubt many of those pay 40% + Tax.
I will, and I don't regard myself as a braveheart nutter...It is pretty clear to me that the level of public services we want are not being sufficiently resourced by taxation, hence the large deficit - And yes I know there are a lot of reasons for the deficit, but the fundamental one is not enough cash to run services. And yes, there are efficiencies to be wrung out of public spending, and applying taxation properly, and the Scottish government is far from perfect, but I can probably afford a little extra - I just looked at it's about £7 a week. I don't like paying more tax than my colleagues down south, but if it allows the Scottish government to provide better services, I will put up with it. If the differential changes, I reserve the right to modify my view.
rossub said:
For anyone earning £50k+ it's more like £1,200 a year more in tax than those South of the border. That's far too much of a difference and has pissed a lot of people off frankly.
Apologies, got my sums wrong. Using the calculator noted above (with the April 2019 estimates), the difference for £50K is £1544 per year, At £100K the difference is £2044. Agreed, it is a wedge - personally I'm OK with it, I can understand those that are not.Arranguez said:
What happens in April?
TBC since the SNP haven’t got sufficient numbers to get their budget through. Based on the draft, higher rate threshold not going up. Unlikely to change that significantly as the SNP will likely need to get green or liberal support and both of those probably favour that move. I’ll leave the opinions on that for the politics forum.
This has been bothering me for weeks, live in Scotland but work in England.
If it goes through ( which it will ). Im Looking to take home about £150 less per month than the people I have my lunch with every day.
Not impressed, I too am happy to pay a little more , it’s more now, But under £100. I would have accepted the threshold rising at the same differential as it is just now. But the gap imo is only
Going to get larger, it will never be clawed back.
If it goes through ( which it will ). Im Looking to take home about £150 less per month than the people I have my lunch with every day.
Not impressed, I too am happy to pay a little more , it’s more now, But under £100. I would have accepted the threshold rising at the same differential as it is just now. But the gap imo is only
Going to get larger, it will never be clawed back.
Interesting conversation, I'll follow it.
Having returned to Scotland from England last year, then retired, I'm no where near the higher tax bracket anymore but feel the different/extra tax bands just add to the complexity of everything rather than simplify it. Like the old Tax Credits system which caused headaches and financial difficulties for many, we need a system that is easy to understand. We need simplicity.which will also be less costly to implement.
Yes we need to maintain or improve public services but there is a lot of waste there, not just in Scotland but UK wide. The Health Service loses a huge amount of money every year to expensive, non productive, overheads and to people who think they can cheat the system getting prescriptions for free (yes I know they are free in Scotland) expecting simple things like paracetamol on free prescription, free medicines to stockpile then bin, etc. Should the NHS be supplying gluten free bread in batches of 10 from Tesco for instance.
Are the SNP good for Scotland? I'm still not sure. It certainly gets the country into the public eye. There was a thread going on PH a few days ago about National Pride and the people of Scotland certainly have that. But splitting from the rest of the UK,,,,not sure it's a good thing to be honest. Anyway, back to the OP's original question, I'll shut up now.
Having returned to Scotland from England last year, then retired, I'm no where near the higher tax bracket anymore but feel the different/extra tax bands just add to the complexity of everything rather than simplify it. Like the old Tax Credits system which caused headaches and financial difficulties for many, we need a system that is easy to understand. We need simplicity.which will also be less costly to implement.
Yes we need to maintain or improve public services but there is a lot of waste there, not just in Scotland but UK wide. The Health Service loses a huge amount of money every year to expensive, non productive, overheads and to people who think they can cheat the system getting prescriptions for free (yes I know they are free in Scotland) expecting simple things like paracetamol on free prescription, free medicines to stockpile then bin, etc. Should the NHS be supplying gluten free bread in batches of 10 from Tesco for instance.
Are the SNP good for Scotland? I'm still not sure. It certainly gets the country into the public eye. There was a thread going on PH a few days ago about National Pride and the people of Scotland certainly have that. But splitting from the rest of the UK,,,,not sure it's a good thing to be honest. Anyway, back to the OP's original question, I'll shut up now.
It’s certainly an interesting situation.
They’ve painted themselves in to a corner with all the bile about red Tory / blue Tory, so there’s sod all chance of an alliance on either side there, even though they’re trying to cuddle up to the red Tory element in West Minster.
The Greens won’t help them without a council tax change, they’ve made that clear. There’s an epic level of Dianne Abbott mathematics in their £10k-allowance-then-1% plan, I think even the SNP will be able to see that doesn’t work.
LibDems might be their best option but they aren’t keen on the budget either.
The biggest problem is their policies are wide open to the pisstake element.
When we already get more per head from central funding and already have a higher tax rate for anyone moderately successful, just how much further are we expected to be pushed?
They’ve painted themselves in to a corner with all the bile about red Tory / blue Tory, so there’s sod all chance of an alliance on either side there, even though they’re trying to cuddle up to the red Tory element in West Minster.
The Greens won’t help them without a council tax change, they’ve made that clear. There’s an epic level of Dianne Abbott mathematics in their £10k-allowance-then-1% plan, I think even the SNP will be able to see that doesn’t work.
LibDems might be their best option but they aren’t keen on the budget either.
The biggest problem is their policies are wide open to the pisstake element.
When we already get more per head from central funding and already have a higher tax rate for anyone moderately successful, just how much further are we expected to be pushed?
Based on the income tax issue alone I doubt it. If they create a council tax “solution” that ends up bending people over then possibly.
For example;
- My local train station to Glasgow, season ticket £2,144
- Carlisle to Glasgow, season ticket £5,368
So the £3k additional cost and minimum of 1hr extra time on the train isn’t offset by saving £1,800 a year income tax.
Where it gets more interesting would be someone living in a nicer part of central Edinburgh who gets thumped by a council tax change.
Much of the new town area has property prices touching half a million for 2 bedroom flats but council tax banded as E or F, so only paying a maximum of £2,600 a year.
A season ticket from Edinburgh to Glasgow is only £1,300 less than Carlisle. So it would be a close call if they were all of a sudden facing a council tax bill north of £5,000.
For example;
- My local train station to Glasgow, season ticket £2,144
- Carlisle to Glasgow, season ticket £5,368
So the £3k additional cost and minimum of 1hr extra time on the train isn’t offset by saving £1,800 a year income tax.
Where it gets more interesting would be someone living in a nicer part of central Edinburgh who gets thumped by a council tax change.
Much of the new town area has property prices touching half a million for 2 bedroom flats but council tax banded as E or F, so only paying a maximum of £2,600 a year.
A season ticket from Edinburgh to Glasgow is only £1,300 less than Carlisle. So it would be a close call if they were all of a sudden facing a council tax bill north of £5,000.
NickCQ said:
How pleasant / practical is it to commute to Edinburgh or Glasgow from English border towns?
I would be expecting a mini property boom in the nicest ones if this tax rate disparity persists.
Berwick upon Tweed train season ticket #3,900 so not really worth it.I would be expecting a mini property boom in the nicest ones if this tax rate disparity persists.
Driving and parking from there daily, horrible.
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