Scotland’s finance minister, Shona Robison, has announced the 2025/26 tax and spending plans. The two lowest tax thresholds will rise by 3.5%, benefiting low and middle earners. This adjustment will offset the increase in UK-wide employers’ national insurance contributions (NICs).
From 6 April 2025, the basic rate of 20% will apply to incomes between £15,398 and £27,491, while the intermediate rate of 21% will cover earnings from £27,492 to £43,662. A higher rate tax of 42% will apply from £43,663. Scots earning £30,300 will pay slightly less tax than their UK counterparts.
However, second home owners and buy-to-let landlords face an increased additional dwelling supplement, rising from 6% to 8% on 5 December 2024, raising £32 million in 2025/26.
The small business bonus scheme for business rates relief will continue, benefiting 200,000 businesses. Properties with a rateable value below £51,000 will still qualify, with relief capped at £110,000.
The budget includes significant investment: £21 billion for the NHS, with £200m to cut waiting times, and a 25% rise in social care spending since the start of the parliamentary term. Green energy initiatives will see £150m in funding, leveraging £1.5bn from the private sector, alongside £321m to create high-tech and innovation jobs.
Plans to end Scotland’s two-child benefit cap in 2026 and align landfill tax rates with England were also confirmed.
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