Scottish Budget 2025 to 2026

The Cabinet Secretary for Finance Local Government, Shona Robinson delivered the 2025/26 Scottish Budget on 4 December.

This article explores the implications, specifically focussing on any accountant advising clients in Scotland.

20:20 Innovation provide an expertly curated CPD training programme for accountants in practice. This includes advising on all areas of UK accounting and taxation - including Scotland. If your firm has a requirement for CPD training in 2025, please explore our CPD training options.

What were the priorities of the Scottish Budget 2025 to 2026?

This Budget was centred on the following priorities to:

• eradicate child poverty;
• grow the economy;
• tackle the climate emergency; and
• ensure high quality and sustainable public services.

What funding was pledged by the Scottish government in the 2025 to 2026 Budget?

To achieve the above, the following funding allocations were pledged:

• A record investment of £21 billion in health and social care;
• 768 million for new affordable homes, 8,000 of which are to be built in the next year.
• £25 million to increase the number of jobs available in Scotland’s green energy sector.
• £3 million for a pilot scheme to deliver free breakfast clubs for children.
• A £34 million uplift to the culture budget.
• £40 million to local government for a climate emergency fund.

What measures were of interest to Scottish taxpayers in the Scottish Budget 2025 to 2026?

The following measures will be of particular interest to the agents of Scottish taxpayers:

• Scottish rates of income tax will not be increased and no new bands will be introduced for the remainder of this parliament. From April 2025, the Basic and Intermediate rate thresholds will increase by 3.5%.The Higher, Advanced and Top rate thresholds will be frozen at their current levels.

The table below outlines the Scottish rates of income tax application to non-savings and non-dividend income in 2025/26:

Key takeaways for accountants advising clients in Scotland on the Scottish Budget 2025 to 2026

If your firm is advising clients in Scotland on the implications and key takeaways from the Scottish Budget 2025/26 then here is a brief overview:

• The winter fuel payment will be restored to every pensioner household.
• Business Rates: The Basic Property Rate will be frozen at 49.8p and a 40% relief will be introduced for hospitality premises liable for the Basic Property Rate, capped at £110,000 per business.
• Rates and bands of residential and non-residential Land & Buildings Transaction Tax (LBTT) will remain at their current levels, although the Additional Dwelling Supplement (ADS) increases from 6% to 8% from 5 December 2024. The increase will not apply to transactions for which legal missives have been signed on or before 4 December.
• Landfill Tax rates will increase from 1 April 2025, in line with those for the rest of the UK.
• A pledge to end the two-child benefits cap and a challenge to the UK government to help Scotland achieve this.

20:20 Innovation provide an expertly curated CPD training programme for accountants in practice. This includes advising on all areas of UK accounting and taxation - including Scotland. If your firm has a requirement for CPD training in 2025, please explore our CPD training options.