Scotland Budget

The 2024 Scottish Budget was presented by Finance Secretary Shona Robison to the Scottish Parliament this week (4 December 2024.) Tax and spending plans were set out for Scotland for 2025/2026.

As a tax adviser, the main budget changes to look out for are in relation to income tax and land and buildings transaction tax (LBTT). As a reminder, a Scottish taxpayer is someone who has a close connection to Scotland. In the most straightforward case this will be an individual who has one UK residence that is in Scotland, and they spend more time in Scotland than the rest of the UK put together.

The trend in recent years has been for Scottish income tax rates to increase. Additional income tax bands have been introduced and it has become more complicated for Scottish taxpayers to calculate their take home pay. Income tax allowances and reliefs, and rates of national insurance contributions continue to be set by the UK Government.

The good news is that no new income tax bands are to be introduced and there are no changes proposed to the rate of income tax. The only changes announced were to the 20% starter rate (to be payable on earnings above £15,398 rather than £14,877) and the 21% intermediate rate (to be payable on earnings above £27,492 rather than £26,562).

With respect to LBTT it was announced that the Additional Dwelling Supplement (ADS) will increase from 6% to 8% from 5 December. The ADS is an amount that is payable in addition to LBTT on second homes or a rental property.

A number of changes to benefits were also announced. The content of budget will be discussed in detail over the next few months. The SNP does not have a majority and so it will need the support of other parties to pass the budget.