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Personal Savings Allowance uses the Scottish bands for Scottish taxpayers (ITA 2007 s. 12B(8)) #2347
Description
What the law says
ITA 2007 s. 12B sets the Personal Savings Allowance:
- £1,000 if none of the individual's income is higher-rate income;
- £500 if some is higher-rate income but none is additional-rate income;
- nil if any is additional-rate income.
For a Scottish or Welsh taxpayer, s. 12B(8)(a)(iv) and (b)(iv) count as additional- or higher-rate income the "income ... which would, if the individual were not a Scottish taxpayer or Welsh taxpayer ..., be income on which income tax is charged at the additional rate" (or the higher rate). So the allowance follows the rest-of-UK bands for everyone: £37,700 and £125,140 of taxable income in 2026-27.
What the model does
savings_allowance reads tax_band. From 2018-19, tax_band uses the Scottish thresholds for a Scottish taxpayer, so:
- taxable income from £62,430 (the Scottish advanced rate) to £125,140 maps to
ADDITIONAL, and the allowance is nil (law: £500); - taxable income from £31,092 (the Scottish higher rate) to £37,700 maps to
HIGHER, and the allowance is £500 (law: £1,000).
tax_band itself is right to follow the Scottish bands for the Marriage Allowance conditions, which do look at the Scottish rates.
Minimal reproduction
policyengine-uk main at c6d15c8, 2026, a single adult with £1,000 of savings interest:
| Country | Pay | tax_band |
savings_allowance |
Law | savings_income_tax |
Law |
|---|---|---|---|---|---|---|
| Scotland | £80,000 | ADDITIONAL | £0 | £500 | £400 | £200 |
| England | £80,000 | HIGHER | £500 | £500 | £200 | £200 |
| Scotland | £45,000 | HIGHER | £500 | £1,000 | £100 | £0 |
| England | £45,000 | BASIC | £1,000 | £1,000 | £0 | £0 |
from policyengine_uk import Simulation
sit = {"people": {"p": {"age": {"2026": 40}, "employment_income": {"2026": 80_000}, "savings_interest_income": {"2026": 1_000}}},
"benunits": {"b": {"members": ["p"]}}, "households": {"h": {"members": ["p"], "country": {"2026": "SCOTLAND"}}}}
Simulation(situation=sit).calculate("savings_allowance", 2026) # [0.]; law: 500Also
Before 2017-18, tax_band places the higher band at thresholds[-2] (£150,000 in 2016-17) rather than the basic rate limit, so 2016-17 higher-rate taxpayers get the £1,000 allowance.
Where it showed up
PolicyBench UK round 2, scenario 015: a Scottish couple with taxable incomes above £62,430. The engine denied both adults the allowance and charged £110 of savings tax, where the law allows £500 each.
Activity
MaxGhenis commentedon Oct 11, 2026
Evidence from PolicyBench UK round 2, an internal audit of policyengine-uk 2.126.7 (references identical on 2.126.8). Six models answered the same 200 households. A reference adversary (a blind GPT-6.1 Sol judge, then reconciliation with the engine log) reviewed consensus disagreements and a sample of single-model misses, and each verdict was adjudicated against the engine code and the law. Cells that turn on this issue:
With #2348 alone the reference moves from £43,701.80 to £43,591.80 (the £110 of savings tax goes). The rest of the gap is HICBC rounding (#2321) and employment expenses whose deductibility the prompt did not state.