Yesterday, Finance Secretary Shona Robinson stepped up to deliver her Scottish Budget for 2026-2027.
Following a disappointing UK Budget, Scotland’s Government had an opportunity to inject life into our local economy.
The announcements were teed up to provide for Scottish families, a stronger NHS and investment in Scotland’s infrastructure. And with no leak in sight (OBR, take notes), the build-up’s suspense ran its due course.
As the dust begins to settle, however, the pre-Budget uncertainty remains.
In particular, the help offered to businesses feels hollow, and we’re left with a £68 billion question mark.
KEY CHANGES FOR BUSINESSES
- Basic, intermediate and higher property rates will be reduced for businesses.
- There will also be £184 million of transitional relief over the next three years for those impacted by the recent revaluation.
- 15% non-domestic rates relief announced, worth £138 million over the next three years for retail, hospitality and leisure.
Craig Hutcheon, BS&O Partner at CP, said:
“The Scottish Budget has done little to alleviate the increased tax costs that businesses have faced in the last few years. There has been some respite offered on rates increases of the past, but even the enhanced relief for retail and hospitality has received a lukewarm response from industry leaders.
Other key Scottish sectors such as oil & gas, which was heavily hit by the UK government’s lack of action on the energy profits levy, didn’t seem to get any constructive measures to improve their current situation. The concern now is whether this leads to the loss of a highly skilled workforce to overseas territories.”
KEY CHANGES FOR INDIVIDUALS
- Income tax thresholds for basic (20%) and intermediate (21%) rates are to be increased by 7.4%. Scottish taxpayers earning over the median income of £31,136 will generally be around £32 better off as a result of this increase.
- No changes to other Scottish income tax bands.
Paul Houston, Private Client Tax Senior Manager at CP, commented:
“Although any increase in tax thresholds should be welcomed, as more taxpayers will be shifted into lower tax bands, the announced increases constitute only a modest income tax cut for most compared to 2025-26. Many Scottish taxpayers, particularly those in the mid-to-upper income ranges, will still be paying significantly more in tax compared to similar earners in the rest of the UK. Still, at least we can buy a couple of extra pints next tax year to soften the blow!”
- All Land and Buildings Transaction Tax rates and bands, including the Additional Dwelling Supplement, will remain unchanged.
- From April 2028, two new council tax bands will be introduced for Scottish properties worth more than £1 million.
QUESTIONS ABOUT HOW THESE CHANGES WILL IMPACT YOU?
Get in touch with the Cooper Parry team today to discuss your options and stay one step ahead.
