On 19 February 2026, the Scottish Parliament agreed to Motion S6M-20844 which sets the following Income Tax rates and thresholds to come into force for Scottish Taxpayers for tax year 2026/27 (compared to the rates and thresholds for 2025/26):
|
Band
|
Rate
|
2025/26
|
2026/27
|
Change
|
|
|
%
|
£
|
£
|
£
|
|
Scottish Starter
|
19
|
1 – 2,827
|
1 – 3,967
|
+ 1,140
|
|
Scottish Basic
|
20
|
2,828 – 14,921
|
3,968 – 16,956
|
+2,035
|
|
Scottish Intermediate
|
21
|
14,922 – 31,092
|
16,957 – 31,092
|
- 2,035
|
|
Scottish Higher
|
42
|
31,093 – 62,430
|
31,093 – 62,430
|
0
|
|
Scottish Advanced
|
45
|
62,431 – 125,140
|
62,431 – 125,140
|
0
|
|
Scottish Top
|
48
|
Over 125,140
|
Over 125,140
|
0
|
This approval is known as setting the Scottish Rate Resolution (SRR). The vote in the Scottish Parliament (necessary for the purposes of section 11A of the Income Tax Act 2007) was approved with Members of the Scottish Parliament (MSP) voting:
- 93 for the Motion;
- 27 against the Motion;
- 6 did not vote; and
- 1 abstention
The SRR is important as, under the Scottish Budget rules in Holyrood, Parliament cannot hold the final stage of the Budget debate (stage three) until the Rate Resolution has been passed. This is due to take on 25 February 2026, at which time the Budget (Scotland) (No 5) Bill will be passed into legislation. This contains more than the above Income Tax rates and thresholds, yet this is the important part as far as payroll and software professionals are concerned (and Scottish Taxpayers).
For Bookkeepers
Software developers can now implement these changes in payroll products now the rates and thresholds have been confirmed for tax year 2026/27. ICB can also populate its Rates and Allowances document and publish this when all information is confirmed.
This is the last Budget Bill and SRR of this Scottish Parliament ahead of elections on 07 May 2026. There are several key points to take from the 2026 Scottish Resolution:
- The Starter rate band limit increases by 40.3%;
- The Basic rate band limit increasess by over 13%; which
- Has the impact of reducing the band of earnings where Income Tax is payable at the Intermediate Rate (21%);
- The Higher, Advanced and Top rates and thresholds are unchanged
