The draft Scottish Budget for the period 01 April 2025 to 31 March 2026 was presented on 4 December.
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 2025/26):
|
Band
|
Rate
|
2024/25
|
2025/26
|
|
|
%
|
£
|
£
|
|
Scottish Starter
|
19
|
1 – 2,306
|
1 – 2,827
|
|
Scottish Basic
|
20
|
2,307 – 13,991
|
2,828 – 14,921
|
|
Scottish Intermediate
|
21
|
13,992 – 31,092
|
14,922 – 31,092
|
|
Scottish Higher
|
42
|
31,093 – 62,430
|
31,093 – 62,430
|
|
Scottish Advanced
|
45
|
62,431 – 125,140
|
62,431 – 125,140
|
|
Scottish Top
|
48
|
Over 125,140
|
Over 125,140
|
So, the rates and bands are unchanged in name and percentage and the proposal means that the Starter Rate band will increase by 22.6% and the Basic Rate band by 6.6%. This has the impact of reducing the Intermediate Rate band (where Income Tax is payable at 21%).
The Scottish Government’s document ‘Scotland's Tax Strategy: Building on our Tax Principles‘ indicates that there is no intention to introduce any new bands or increase the rates of Scottish Income Tax for the duration of this Parliamentary session (with elections due no later than 07 May 2026).
For Bookkeepers
The Scottish Budget Bill will be introduced to the Scottish Parliament in mid-December 2024 for the scrutiny process. As the Scottish National Party do not form a majority Government, they will be reliant on support of abstentions from MSPs of other political parties.
The Scottish Rate Resolution which confirms the Scottish Income Tax values is expected to be confirmed in mid-February 2025 and is only available in draft form at the moment.
Note that the way ICB has displayed the Income Tax thresholds is 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 some publications from the Scottish Government do include this value.
