The Scottish Government has confirmed formally that all income tax rates and thresholds will remain at the 2016/17 levels for the 2017/18 tax year. Consequently, top rate taxpayers in Scotland will pay more than their British counterparts south of the border.

For the rest of the UK, the threshold after which income tax is levied at 40% will increase from £43,000 to £45,000. As the equivalent threshold in Scotland will remain at £43,000, some Scottish taxpayers will pay more than their British counterparts. It is understood that approximately 370,000 people in Scotland will be affected.

Derek MacKay, Scottish finance secretary, said: ‘Having considered the proposals put to me, I confirm that I will lodge a Scottish Rate Resolution that sets the same tax rates as originally proposed but which applies a cash freeze on the higher rate threshold. This change protects basic rate taxpayers while generating an additional £29m of revenues in 2017/18. And it ensures that 99% of taxpayers on the same income this financial year will not be paying any more income tax in the next financial year. These proposals balance the need to raise additional revenues, whilst asking the highest earners to forego a significant tax cut at a time of UK government austerity. For the 10% of people covered by this higher rate the income foregone amounts to around £7.70 a week.’