On 15 December 2016, The Scottish Draft Budget 2017-18 was presented to Holyrood by Derek Mackay, the Scottish Finance Secretary, setting out Scotland’s tax and spending plans for the upcoming year.
The Scottish Government is committed to protecting low-income taxpayers and, as such, is proposing to freeze the basic rate of income tax at 20 per cent. The Scottish Government is also proposing to freeze the higher and additional rates at 40 per cent and 45 per cent respectively. The higher rate of income tax threshold is proposed to increase by inflation to £43,430 in 2017-18. This increase in the higher rate of income tax threshold, when combined with the increase in the personal allowance, means that low and middle income taxpayers will be protected at a time of rising inflation, while priority is given to the protection of public services over a substantial tax cut for the top 10 per cent of taxpayers.
The Scottish Government can also confirm that the higher rate of income tax threshold will increase by a maximum of inflation in all future years of this Parliament. In 2017-18 proposed rates and bands of Scottish Income Tax as summarized below:
| Scottish Income Tax Rates | Scottish Bands |
| Basic rate 20% | Over £11,500* – £43,430 |
| Higher rate 40% | Over £43,430 – £150,000 |
| Additional Rate 45% | Over £150,000 and above |
