The Scottish Government unveiled its 2025-26 Budget this week, a comprehensive plan aimed at addressing the most pressing challenges up north, including child poverty, climate change, and the sustainability of public services. With a focus on progressive taxation. The main highlightfrom the budget you'll be interested in are any tax changes, of which there are - but not big changes.
Here is a comparison of income tax rate changes proposed for Scotland starting from April 2025:
| Band | Tax Rate | 2024-25 Post-Allowances | 2025-26* Post-Allowances |
|---|---|---|---|
| Starter (for savings) | 0 | 0 to 5,000 | 0 to 5,000 |
| Starter | 19 | 0 to 2,306 | 0 to 2,287 |
| Basic | 20 | 2,307 to 13,991 | 2,828 to 14,921 |
| Intermediate | 21 | 13,992 to 31,092 | 14,922 to 31,092 |
| Higher | 42 | 31,093 to 62,430 | 31,093 to 62,430 |
| Advanced | 45 | 62,431 to 125,140 | 62,431 to 125,140 |
| Additional/Top | 48 | Over 125,140 | Over 125,140 |
The changes above raise near £2 billion more than if Scotland stuck with rUK (rest of the UK) rates and bands.
The Higher, Advanced, and Top rate thresholds will remain frozen, but the starter rate band (non-savings) will increase by just over 20 percent, and the Basic rate band by around 6 percent, meaning that lower-income households benefit most by this Budget.
The Intermediate rate threshold will rise by 3.5 percent, which is double the current UK inflation rate.
For everyone else the bands and rates remaining frozen means they will see net income falls in real terms due to the fiscal drag effect.
The Scottish Budget 2025-26 is currently in draft form and will remain so until it completes the scrutiny process in the Scottish Parliament. This process typically takes several months, with the final budget being ratified and approved by mid-February 2025, so we will update Scottish rates after that date.
To get an idea on how much your tax deductions could change, we've attached a fast tax calculator for you.
Since the Scottish National Party (SNP) does not hold a majority in the Scottish Parliament, the budget proposals may require support from other political parties or abstentions during voting to pass. This means that the final budget could differ from the current draft, depending on negotiations and amendments made during the scrutiny process.
