2024/25 Scottish and Welsh Budgets

The Scottish and Welsh Budgets were both published on 19 December 2023. Scotland and Wales typically publish their budgets after the Chancellor's Autumn Statement, in which the UK Government allocates money to its devolved administrations.

Scottish and Welsh Governments have power to set some, but not all, taxes. Read on for news on the devolved taxes and other topics that may be of interest to taxpayers in Scotland and Wales.

20:20 Innovation will also be offering our Branded Budget PDF product from as little as £184, providing an expert-led analysis of the Budget on 6 March.

Scottish Budget 2024 25

Let's look at the key implications of the Scottish budget 2024 25, announced by the SNP in Scottish parliament:

Scottish rate of income tax (SRIT)

SRIT is paid by taxpayers whose main residence has a Scottish postcode. The rates and bands shown below apply to the taxpayer’s earned income (i.e. non-savings, non-dividend income). For those with savings and dividend income, the rates and bands applicable to the rest of the UK apply, because income tax on those types of income has not been devolved. Scottish taxpayers also benefit from the UK personal allowance.

The 2024/25 Budget included uplifts to the Starter and Basic rate bands, although the Higher Rate threshold is maintained at its current level above inflation. A new ‘Advanced’ rate is applicable to income between £75,001 and £125,140. The Top rate of tax is increased by 1p to 48%; no other rates are changed.

The current LBTT rates and thresholds will be maintained and first-time buyer relief for residential properties will continue.

First-Time Buyer relief may apply on the first £175,000 of residential purchases. If buying an additional residential property, the 6% Additional Dwelling Supplement will apply to the residential rates above.

Scottish non-domestic rates and reliefs are confirmed annual in the Budget. It was announced that the Basic Property Rate will be frozen for 2024/25. A new 100% will be offered to hospitality businesses located on Scottish Islands. Enterprise Area relief was set to end in March 2024 but will now be phased out over a further two years until 2025/26.

Let's look at the key implications of the Welsh Budget for 2024:

Welsh Rates of Income Tax (WRIT)

Income Tax is only partially devolved to the Welsh Government. The UK Government reduces each of the three income tax rates for Welsh taxpayers by 10p. The Welsh Government then decides on the level at which to set the WRIT. The power to set different income tax bands and thresholds is not devolved. The Budget announced that 2024/25 WRIT for the Basic, Higher and Additional rates bands will be set at 10p. When the WRIT is added to the UK income tax rates (that have already been reduced by 10p for Welsh taxpayers), the effective rates are the same as those applying to England and Northern Ireland (Basic rate 20%, Higher rate 40% and Additional Rate 45%).

Land Transaction Tax (LTT)

No changes were announced regarding the rates and bands of LTT, which have been at their current levels since 10 October 2022.

LTT at a glance

Welsh Business Rates

The increase to the Non-Domestic Rates (NDR) multiplier in Wales will be capped at 5% for 2024-25. In addition, the Welsh Government has committed to provide a fifth successive year of support for retail, leisure and hospitality businesses. Eligible ratepayers will receive 40% NDR relief for the duration of 2024-25. As in previous years, the relief will be capped at £110,000 per business across Wales.

What next?

Income Tax, Stamp Duty-equivalent taxes, Non-domestic Rates, Council Tax and Landfill Tax are currently the only taxes that are fully or partially devolved to Scotland and Wales. This means that Scottish and Welsh taxpayers will also be affected by the UK Budget that is set to take place on 6 March 2024.

Can 20:20 Innovation help with the Scottish and Welsh budgets?

On 7th March you will be able to join Tax Technical Director, Sharon Cooke, on our Budget Update webinar.

This training will be free to all 20:20 Innovation members as well as anyone (including non-members) who purchases our Branded Budget PDF product. The training will even follow the order of our newsletter content to help accountants understand and communicate the changes to their clients.

We will also be offering an additional Tax Rates PDF product to summarise the government’s tax changes, any easing of the tax burden and any other significant changes.

If you would like more information about joining 20:20 Innovation why not book a free 30-minute demo with our team today or call us on +44 (0) 121 314 2020.