The Scottish Finance Secretary, Shona Robison, unveiled her Government’s tax and spending plans for 2025-26 on 4 December. We’ve set out some of the key tax points from the statement below.
Income tax
The Scottish Government has the power to set the rates and bands of income tax on non-savings, non-dividend income for taxpayers who live in Scotland. This means that most people living in Scotland who receive income from employment, self-employment or property rentals will pay tax on this income at the Scottish rates of income tax.
This money is paid via HMRC to the Scottish Government to fund spending in Scotland.
The Finance Secretary confirmed that the Starter and Basic rate thresholds will increase by 3.5% from 6 April 2025, meaning that someone earning £30,000 will be approximately £15 better off next year. Ms Robison confirmed that all other income tax thresholds will be frozen for the remainder of this Parliament, which is expected to be early 2026. The rates of tax in each band will also remain the same.
The Scottish rates of income tax for 2025/26 will be:
| Band | From | To | Rate |
| Starter | 12,571 | 15,397 | 19% |
| Basic | 15,398 | 27,491 | 20% |
| Intermediate | 27,492 | 43,662 | 21% |
| Higher | 43,663 | 75,000 | 42% |
| Advanced | 75,001 | 125,140 | 45% |
| Top | 125,140 | 48% |
Land and Buildings Transaction Tax (LBTT)
The Scottish equivalent to Stamp Duty Land Tax, LBTT is paid by those who buy residential and non-residential property.
The main change to LBTT is that from 5 December 2024, the rate paid by those who buy second homes – the Additional Dwellings Supplement (ADS) will increase from 6% to 8%. This will impact buy-to-let landlords in particular. A landlord buying a buy-to-let property worth £100,000 will pay approximately £2,000 in LBTT as a result of this change.
Business Rates
No major changes were proposed to business rates in this budget.
What about National Insurance, VAT and Corporation tax?
The Scottish Government only has control over some devolved taxes, with the rest being controlled by the UK Government. Read our overview of the UK budget for 2025/26, which was announced by Rachel Reeves, the Chancellor of the Exchequer in Autumn 2024.
Talking Numbers Accountancy and Bookkeeping can help you to understand what this means for you. Tax doesn’t need to be taxing – we can help you understand your numbers and ensure that you are taking advantage of all available reliefs and allowances. Get in touch today for a free, no-obligation consultation.
