Scottish Budget confirms bands and rates for 2025/26
Ahead of the Scottish Budget, there were rumours that tax hikes were on the way. However, the announcements made on the day will see some easing of tax for lower earners. What’s the full story?
On 4 December the Scottish government published its 2025 Budget, which included the proposed income tax rates for 2025/26. The good news is that the feared changes didn’t materialise. Instead there was some easing of tax for those on lower incomes. The proposed income tax rates for 2025/26 are as follows:
|
Band |
Income range |
Rate |
|
Starter rate (on income exceeding tax reliefs and allowances) |
£12,571 - £15,397 |
19% |
|
Basic rate |
£15,398 - £27,491 |
20% |
|
Intermediate rate |
£27,492 - £43,662 |
21% |
|
Higher rate |
£43,663 - £75,000 |
42% |
|
Advanced rate |
£75,001 - £125,140 |
45% |
|
Top rate |
Above £125,140 |
48% |
If the changes are approved by the Scottish Parliament, they will mean the Starter and Basic bands increase above inflation, by 22.6% and 6.6% respectively. The document also pledges that no new bands will be introduced, and no further changes to rates will be made by the current Parliament.
Related Topics
-
Selling spare items to your company
You’re short of cash but if you use the traditional methods to take more money out of your company you’ll pay higher rate taxes. Is there another way to extract profits without paying income tax or NI?
-
No such thing as a (tax) free lunch?
You run a small consultancy company and treat your staff to lunch in the office once a week. Your bookkeeper says it’s a taxable benefit in kind because staff lunches are only exempt if they are provided in a workplace canteen. Is this correct?
-
Judge criticises use of fabricated AI-generated cases in HMRC appeal
A tax tribunal judge has criticised the use of apparently fabricated case references generated by artificial intelligence in an appeal against HMRC. The incident highlights growing concerns over the use of AI tools in legal and tax proceedings. What happened?