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Tax allowances and amounts (Scotland)

This fact sheet covers ScotlandWe also have a version for England & Wales if you need it.

This fact sheet tells you about the current tax rates and allowances.

Use this fact sheet to find out about:

  • personal allowances for income tax;
  • income tax rates and bands;
  • National Insurance contributions for sole traders and partners in a business partnership;
  • National Insurance contributions for directors of limited companies and employees;
  • corporation tax; and
  • value added tax (VAT).

Income tax allowances

Personal allowances2021/222022/23
Personal allowance (1)£12,570£12,570
Income limit for personal allowance (2)£100,000£100,000
Income limit for married couple's allowance (3)£30,400£31,400
Married couple's allowance (maximum amount) (4)£9,125£9,415
Married couple's allowance (minimum amount) (5)£3,530£3,640
Blind person's allowance£2,520£2,600


(1) and (2) Since 2016/17 everyone is entitled to the same personal allowance and income limit, no matter when they were born.

(3) Where income is above this limit, the allowance is reduced by £1 for every £2 above the limit.

(4) and (5) The relief for married couple's allowance is given at 10%.

Income tax rates and bands

Scottish starter rate 19%Personal allowance - £2,097Personal allowance - £2,162
Scottish basic rate 20%£2,097 - £12,726£2,162 - £13,118
Scottish intermediate rate 21%£12,726 - £31,092£13,118 - £31,092
Scottish higher rate 41%£31,092 - £150,000£31,092 - £150,000
Scottish top rate 46%Over £150,000Over £150,000
  • From 6 April 2017 the bands and rates for Scottish Income Tax are set by the Scottish Government. These differ from those set in England and Wales.
  • From 2018/19 the Scottish Government introduced the Scottish starter rate and Scottish intermediate rate.
  • Your personal allowance goes down by £1 for every £2 that your adjusted net income is above £100,000. This means your allowance is zero if your income is £125,140 or above for 2022/23.
  • From 2020/21 tax relief for finance costs for individual landlords of residential properties is fully restricted to the basic rate only. For more information about the changes which were phased in from 2017/18, see HM Revenue and Customs guidance on Tax relief for residential landlords: how it's worked out.

National Insurance contributions class 2 and class 4

Class 2£3.05pw£3.15pw
Class 2 - Small profits threshold (6)£6,515pa£6,725pa
Class 4 - Lower profits limit£9,568pa£11,908pa
Class 4 - Upper profits limit£50,270pa£50,270pa
Class 4 - Rate between upper and lower profits limit (7)9%10.25%
Class 4 - Rate above upper profits limit (8)2%3.25%


(6) In the Spring Statement, government announced that from April 2022 self-employed individuals will not pay class 2 National Insurance contributions on profits between the Small profits threshold and the Lower profits limit, but will continue to be able to build up National Insurance credits. For more information, see GOV.UK.

(7) and (8) For 2022/23 the rates shown include the 1.25% uplift that funds NHS, health and social care.

Example calculations

  • If you are under retirement age and either a sole trader or a partner in a partnership, the following examples will help you work out an estimate of the monthly income tax and National Insurance you should pay on your profit from your business.

  • You will then be able to work out your Available drawings from your business. This will help you work out your household budget to show you what you have available to pay your creditors.

  • In the following examples, the figure taken from the business budget sheet for Drawings (what your profit is before tax and National Insurance) is £4,250 per month.

  • The example calculations should not be used for income from residential properties.

Online calculations

If you prefer, you can use our online budget to do the income tax and National Insurance calculations for you.

Estimated monthly income tax calculation for 2022/23

1.Insert the monthly Available drawings figure from Your business and household budget sheet£4,250A
2.Multiply Figure A by 12 to get your yearly drawings figure£51,000B
3.Insert your Personal allowance for income tax figure£12,570C
4.Take Figure C (your Personal allowance for income tax) away from Figure B (your yearly drawings) to work out what part of your drawings you pay tax on£38,430D
5.Multiply the first £2,162 of Figure D by 19% to work out how much Scottish starter rate tax you need to pay£410.78E
6.Multiply the next £10,956 of Figure D by 20% to work out how much Scottish basic rate tax you need to pay£2,191.20F
7.Multiply the next £17,974 of Figure D by 21% to work out how much Scottish intermediate rate tax you need to pay£3,774.54G
8.Take away £31,092 from Figure D and multiply the answer by 41% to work out how much Scottish higher rate tax you need to pay (you only need to do this step if Figure D is more than £31,092)£3,008.58H
9.Add together Figure E, Figure F, Figure G and Figure H to get an estimate of your yearly tax liability£9,385.10I
10.Divide Figure I by 12 to get an estimate of your monthly tax liability£782.09J

Use J £782.09 as the Estimated tax figure on Your business and household budget sheet.

Estimated monthly National Insurance contribution calculations for 2022/23

Class 4 National Insurance contributions

1.Use Figure B from above (unless Figure B is more than the upper profits limit of £50,270, then insert £50,270)£50,270K
2.Figure K minus £11,908 (the lower profits limit)£38,362L
3.Figure L multiplied by 10.25% (the rate payable between the lower and upper limits)£3,932.11M
4.Figure B from above minus £50,270 (if the answer is less than 0, insert 0)£730N
5.Figure N multiplied by 3.25% (the rate payable above upper limit)£23.73O
6.Add together Figure M and Figure O to get your estimated yearly amount of class 4 contribution£3,955.84P
7.Divide Figure P by 12 to get your estimated monthly class 4 contribution£329.65Q

Use Q £329.65 as the National Insurance class 4 figure on Your business and household budget sheet.

Class 2 National Insurance contributions

If you have to pay Class 2 National Insurance contributions, or decide to do so voluntarily, use a flat rate of £13.65 per month (£3.15 per week) as the Class 2 National Insurance contribution figure on Your business and household budget sheet. 

Corporation tax

Main rate19%19%

From 1 April 2015, there is a single corporation tax rate for non-ring fence profits.

Value added tax (VAT)

Standard rate20%20%
Reduced rate5%5%
Zero rate0%0%
Registration level£85,000£85,000
De-registration level£83,000£83,000

Making Tax Digital for VAT was introduced on 1 April 2019 for businesses with a taxable turnover above the VAT registration threshold. From 1 April 2022, unless HMRC has given an exemption from doing so, all VAT registered businesses must be signed up to Making Tax Digital for VAT whatever their turnover. For more information, go to

National Insurance contributions class 1

Lower earnings limit primary class 1£120pw£123pw
Upper earnings limit primary class 1£967pw£967pw
Primary threshold (from 6 April 2022 to 5 July 2022)£184pw£190pw
Primary threshold (from 6 July 2022 to 5 April 2023)£184pw£242pw
Secondary threshold£170pw£175pw
Employee rates2021/222022/23
Class 1 rate between primary threshold and upper earnings limit12%13.25%
Class 1 rate above upper earnings limit2%3.25%
Employer rates2021/222022/23
Secondary class 1 rate above second threshold (9)13.8%15.05%
Class 1A rate on employer provided benefits13.8%15.05%


(9) For information about National Insurance thresholds and rates that apply to special categories, such as for employers of qualifying veteran, freeport and apprentice employees, see GOV.UK.