On 13 January 2026, Shona Robison Member of the Scottish Parliament (MSP) and Cabinet Secretary for Finance and Local Government presented the Scottish Budget for the period 01 April 2026 to 31 March 2027.
Scotland has shared Income Tax powers with the UK Government and can set its own rates and bands under the Scottish Income Tax (SIT) system. This applies to non-savings, non-dividend (NSND) income. The following bands and rates are proposed, with the bands net of the standard UK Personal Allowance (£12,570 in 2026/27).
The Scottish Government’s Tax Policy document fulfils the commitments that were made to not introduce any new bands or increase rates. This applies for the duration of the current Scottish Parliament, due to end in May 2026. In summary:
- The Starter rate band limit will increase by 40.3%;
- The Basic rate band limit will increase 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
|
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
|
For Bookkeepers
ICB has displayed the Income Tax thresholds exclusive of the value of the UK standard Personal Allowance. This is the way that software will have to effect these in their products and it is incorrect to include the £12,570, even though the ‘Scottish Income Tax: rates and bands’ publication from the Scottish Government do include this value.
The Scottish Budget Bill will now be introduced to the Scottish Parliament for the scrutiny process with the final budget approval vote scheduled for 05 March 2026. This process will set the Scottish Rate Resolution for tax year 2026/27 which is available as a draft motion. Correctly, this does not include the value of the UK Personal Allowance.
Note that the Scottish National Party (SNP) do not form a majority Government so they will be reliant on support of abstentions from MSPs of other political parties. In this regard, though, Scottish Labour has said it will not block the minority Government’s plans which means the Budget will pass.
