Scottish Budget Statement 2025-26

Posted on 9th December 2024 by Streets - Income Tax

Scotland’s 2024 Budget delivers on public priorities with investments in services, poverty reduction, and economic growth. Tax rates stay frozen, but bands shift to protect low incomes. A hopeful step forward for Scotland’s future!

Scotland’s Deputy First Minister and Finance Secretary, Shona Robison delivered her second Budget statement to the Scottish parliament on 4 December 2024.

The Finance Secretary said the following:

‘I am proud to present a budget that delivers on the priorities of the people of Scotland. Parliament can show that we understand the pressures people are facing. We can choose to come together to bring hope to people, to renew our public services, and deliver a wealth of new opportunities in our economy.

This Budget invests in public services, lifts children out of poverty, acts in the face of the climate emergency, and supports jobs and economic growth.

It is a budget filled with hope for Scotland’s future, and I look forward to working with all parties in Parliament to secure agreement around its provisions.’

The measures announced for next year are expected to raise an additional £1.7 billion in Income Tax revenue compared to if the Scottish Government had followed UK Government policy.

There were no changes announced to the Scottish Income Tax rates, which will be frozen until at least the end of the current Parliament. The Starter rate band is set to increase by 22.6% and the Basic rate band by 6.6% in 2025-26. This means that a larger portion of people's income will be taxed at the starter and basic rates helping to protect lower income households.

The proposed Scottish rates and bands for 2025-26 are as follows:

Starter rate – 19%	£12,571 - £15,397
Basic rate – 20%	£15,398 - £27,491
Intermediate rate – 21%	£27,492 - £43,662
Higher rate – 42%	£43,663 - £75,000
Advanced rate – 45%	£75,001 - £125,140
Top rate – 48%	Above £125,140

The standard personal allowance remains frozen at £12,570.

The Additional Dwelling Supplement (ADS) for the land and buildings transaction tax (LBTT) increased from 6% to 8% with effect from 5 December 2024. The ADS is an extra charge added to any LBTT that may be due when purchasing an additional residential property in Scotland. No other changes to LBTT were announced.

The standard rate of Scottish landfill tax will rise to £126.15 per tonne and the lower rate to £4.05 per tonne from April 2025 maintaining alignment with the corresponding taxes in the rest of the UK.

The Budget measures are subject to final approval by the Scottish parliament.

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