From April, the levels of UK income tax rates paid in Scotland will be reduced by 10 pence in the pound, with the Scottish Government setting a new levy on top.
In theory this could make a real difference to take home pay north of the border.
In December, however, John Swinney announced that the Scottish rate for 2016/17 would be set at 10 pence, keeping it in line with the rest of the UK. This means that the only change you will see on your payslip will be a new tax code starting with S for Scotland. Meanwhile, the Scottish Government has also elected to freeze council tax for another year.
The Scottish rate of income tax does not affect the personal allowance, which is due to increase to £10,800 with effect from 6 April. A £5,000 tax-free dividend allowance will also be introduced.
2016 is shaping up to be a brighter year for savers, with the launch of a new personal savings allowance. It will apply to up to £1000 of a basic rate taxpayer’s savings income in a bank or building society, and up to £500 for higher rate taxpayers.
The personal savings allowance comes in addition to the tax advantages currently available from Individual Savings Accounts, creating a greater incentive to save.
Richard Libberton is a private wealth manager at Anderson Strathern Asset Management.
This article was originally published in The Scotsman.
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