Scottish Budget 2026/27
Scottish Budget Review 2026
Information correct as at 14 January 2026
Shona Robison’s final Scottish Budget for 2026/27 was delivered yesterday after a delay caused by the late UK Budget, marking a pivotal moment ahead of the May Holyrood elections and her departure from frontline politics. The Budget sets out tax, welfare, and public‑service plans that will shape Scotland’s political debate over the coming months.
The main announcements are noted below.
Scottish Rates of Income Tax (SRIT)
The Scottish Parliament may vary Income Tax bands and allowances. It cannot set the personal allowance which remains the same as the rest of the UK (at £12,570). The rates and bands for the 2026/27 tax year for Scottish resident taxpayers are noted below. Of note are the increases of 7.4% to both the Scottish starter rate and the Scottish basic rate bands. The thresholds for the other bands remain as they were for 2025/26.
There are no changes to the rate of Income Tax applicable to each band.
| Year | 2025/26 | 2026/27 | ||
| Tax band and rate | From | To | From | To |
| Personal allowance (0%) | £0 | £12,570 | £0 | £12,570 |
| Starter rate (19%) | £12,571 | £15,397 | £12,571 | £16,537 |
| Scottish basic rate (20%) | £15,398 | £27,491 | £16,538 | £29,526 |
| Intermediate rate (21%) | £27,492 | £43,662 | £29,527 | £43,662 |
| Higher rate (42%) | £43,663 | £75,000 | £43,663 | £75,000 |
| Advanced rate (45%) | £75,001 | £125,140 | £75,001 | £125,140 |
| Top rate (48%) | Over £125,140 | Over £125,140 | ||
The UK Budget in November 2025 increased the rate of Income Tax charged on property income in the rest of the UK by 2p from 2027-28. The UK Government has committed to devolve an equivalent power to the Scottish Parliament. The first year this power could come into effect would be 2027-28 (i.e. from 6 April 2027 onwards).
Land and Buildings Transactions Tax (LBTT)
There are no changes to LBTT. There is an ongoing review taking place into the operation of LBTT which will be delivered before the end of this Parliamentary session.
Scottish Landfill Tax (SLT)
There are no changes to Scottish Landfill Tax. The Scottish rates are aligned with the equivalent UK rates.
Scottish Aggregates Levy (SAT)
Scottish Aggregates Tax (SAT) will be the third fully devolved tax in Scotland, replacing the UK Aggregates Levy for aggregate commercially exploited in Scotland from 1 April 2026. The SAT in its first year will match that of the UK Aggregates Levy (£2.16 per tonne of taxable aggregate).
Scottish Air Departure Tax (ADT) and Private Jet Supplement
There will also be a new Airport Departure Tax from April 2027 to replace the system that applies across the rest of the UK. The UK-wide air passenger duty will continue to apply in Scotland until the new Air Departure Tax is implemented. The applicable Scottish rates will match the UK Government’s APD rates and bands for 2027-28. There will be some protection for islands more dependent on flights.
A Private Jet Supplement will be introduced (within the operation of ADT) from April 2028 which mirrors proposals in the wider UK Budget last November.
The Scottish Building Safety Levy (BSL)
The BSL will be introduced in April 2028. Details are to be announced.
Future Tax changes
The Scottish Government is committed to considering options for a Carbon Land Tax, as part of exploring regulatory and fiscal changes that could be made to further support land reform and reduce greenhouse gas emissions from land.
Council Tax bands
Mirroring proposals with the UK Budget in November, the Scottish Government will introduce two new council tax bands for properties currently worth more than £1m. This is to apply from April 2028.
The two new bands will be:
- Band I for properties valued between £1 million and £2 million; and
- Band J for properties valued above £2 million.
Business Rates and Business Rates Relief
Non-domestic properties are periodically revalued. The next revaluation is scheduled for 01 April 2026 with a “tone date” of 01 April 2025.
Small Business Bonus Scheme relief will be maintained at the existing rates and thresholds for the next three years. Shootings and deer forests will be excluded from eligibility for Small Business Bonus Scheme relief from 1 April 2026, except where:
- shooting rights are exercised solely for the purposes of deer management, including to prevent damage to woodland or to agricultural production, environmental management or vermin control;
- crofts; and
- all forms of agricultural and small landholding tenancies, leases for new entrants, and leases agreed for environmental purposes.
The Scottish Government will offer a 15 % relief in 2026-27, and for the duration of the three-year revaluation cycle, to properties in the retail, hospitality, and leisure sectors which are liable for the Basic or Intermediate Property Rate (those with a rateable value up to and including £100,000), capped at £110,000 per business per year.
Additionally, the 100% non‑domestic rates relief currently available for hospitality premises located on islands (as defined by the Islands (Scotland) Act 2018) as well as specified remote areas, will be capped at £110,000 per business.
Scottish Child Payment
The Scottish Child Payment will rise to £28.20 per week in April 2026 and from April 2027 the payment will be £40 per week in respect of every child in the household under the age of one.
As always, the information outlined above is for general guidance purposes only. We appreciate that every individual and business has different circumstances and you should always seek appropriate professional advice before you act on any of the information provided. No responsibility for loss occasioned by any person acting as a result of the material contained in this review can be accepted by GWA, its Partners and employees.
If you would like more information or advice on the Budget or require wider business planning or financial guidance, please do get in touch with your GWA Partner.
Alternatively, if you are not a GWA client please do contact us to arrange a free initial meeting.
