Scottish Government announces 2026/27 Budget
The Cabinet Secretary for Finance and Local Government, Shona Robison MSP, has delivered her final Scottish Budget statement to the Scottish Parliament. In the final Scottish Budget before the May 2026 election, she announced the tax rates and allowances for the 2026/27 tax year.
Income Tax
There will be no changes to the rates of Income Tax paid by Scottish taxpayers on non-savings, non-dividend income. However, the 19% Starter rate band limit and 20% Basic rate band limit will be increased in the 2026/27 tax year as follows (assuming Personal Allowance is available):
| 2025/2026 | 2026/2027 | |||
| Band | Rate | Band | Rate | |
| Starter | £12,571 - £15,397 | 19% | £12,571- £16,537 | 19% |
| Basic | £15,398 - £27,491 | 20% | £16,538 - £29,526 | 20% |
| Intermediate | £27,492 - £43,662 | 21% | £29,527 - £43,662 | 21% |
| Higher | £43,663 - £75,000 | 42% | £43,663 - £75,000 | 42% |
| Advanced | £75,001 - £125,140 | 45% | £75,001 - £125,140 | 45% |
| Top | Over £125,140 | 48% | Over £125,140 | 48% |
More details on Income Tax have been released in the Scottish Government's Income Tax technical factsheet for 2026/27.
In the supporting documentation issued today, it was noted that the Scottish Parliament will be given devolved powers to set its own property tax rates after the UK government introduces new property tax rates from 2027/28. Although this was acknowledged, no indication was given as to whether the changes elsewhere in the UK would be replicated in Scotland.
The ATT has submitted a Finance Bill representation, highlighting how the anomaly in the tax relief for residential property mortgage interest payments is expected to be linked to the new 22% basic rate of tax for property income in the rest of the UK. This could create distortions if the rates of tax on property income diverge across the UK.
Land and Buildings Transaction Tax
The rates of Land and Buildings Transaction Tax (LBTT) for both residential and non residential property remain unchanged. This includes the 8% Additional Dwelling Supplement.
The Scottish Government will bring forward legislation to introduce an LBTT exemption for transactions in Co-Ownership Authorised Contractual Scheme units (CoACS) from 1 April 2026.
Scottish Landfill Tax
The Scottish Government will continue to align Scottish Landfill Tax rates with UK Landfill Tax rates. As such, the standard rate will increase to £130.75 per tonne and the lower rate to £8.65 per tonne from 1 April 2026.
Scottish Aggregates Tax
As confirmed in the UK Budget, Scottish Aggregates Tax (SAT) replaces UK Aggregates Levy for aggregate commercially exploited in Scotland from 1 April 2026. The Scottish Government proposes that the rate of SAT should be initially be set at £2.16 per tonne of taxable aggregate, in order to align with the UK Aggregates Levy for the first year.
Council Tax
Whilst the Scottish Government consults on the future of Council Tax in Scotland, two additional Council Tax bands will be introduced from 1 April 2028:
- Band I for properties valued between £1 million and £2 million and
- Band J for properties valued above £2 million
The scope of Band I and Band J will be based on up-to-date values of properties, rather than the April 1991 valuations which will continue to apply for the time being.
Unlike the High Value Council Tax Surcharge being introduced in England, it is believed the local Council will receive the additional Council Tax revenue generated in Scotland. Although it may be the case that the allocation of Scottish Government funding to Councils in future will take account of the additional money raised.
Air Departure Tax
The Scottish Government intends for Air Departure Tax (ADT) to be operational from 1 April 2027, in place of the UK Air Passenger Duty (APD) for passengers departing from Scottish airports. In line with the approach taken for SAT, the rate of ADT will match APD for the first year of operation, before a new ADT Private Jet Supplement will be charged from 1 April 2028.
Ahead of the implementation of ADT, the Scottish Government will consult with the aviation industry and regional stakeholders on a new Highlands and Islands exemption.
Scottish Building Safety Levy
Ahead of the Scottish Budget, it had already been announced that the Scottish Building Safety Levy would be postponed by one year until April 2028.
Non-Domestic Rates
Several announcements were made in respect of Non-Domestic Rates, including retaining reliefs such as the Small Business Bonus Scheme and the Business Growth Accelerator reliefs. Additional reliefs, including Day Nursery and Fresh Start reliefs, were also announced.