Scottish Budget Update

The Scottish Budget took place on 4th December 2024. Tax rates and thresholds for England, Northern Ireland and Wales are set by the UK Government, however, Scotland sets its own rates. Here’s a brief overview of the changes that were announced which will impact income tax thresholds, benefits and Stamp Duty for Scottish taxpayers.

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Tax thresholds - with effect from 6th April 2025, Scottish income tax thresholds will change for the following tax bands:

Starter (19%) will be payable on earnings between £12,571 and £15,397
Basic (20%) will be payable on earnings between £15,398 and £27,491
Intermediate will be (21%) payable on earnings between £27,492 and £43,662

The Personal Allowance is unchanged, as are Higher, Advanced and Top income tax earning thresholds. NB - the Personal Allowance is reduced by £1 for every £2 earned over £100,000.

Stamp Duty on Second Homes - the Additional Dwelling Supplement – payable on second homes and additional properties in Scotland - is rising from 6% to 8%. The increase will take effect from Thursday 5th December.

Carer Support Payment or Carer's Allowance - from April 2025, those claiming Carer Support Payment or Carer’s Allowance will be able to earn £196 per week (up from £151) while still receiving the benefit. The entitlement is lost completely if earnings are over this limit.

Pension Age Winter Heating Payment – this new payment will be introduced next winter (2025/26) for all Scottish pensioners. Households with a pensioner receiving qualifying benefits will get either £200 or £300 depending on their age. All other households with a pensioner will receive £100.

If you feel that the changes announced in the budget may impact your financial planning goals, please ensure that you seek advice before altering any of your existing arrangements.

Full details of all the changes announced in the Budget can be found here:

https://www.gov.scot/publications/scottish-budget-2025-2026/

Please note:

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

The content was accurate at the time of writing, changes in circumstances, regulation and legislation after the time of publication may impact on the accuracy of the article.

This information is based on our current understanding of taxation legislation and regulations. Any levels and bases of, and reliefs from, taxation are subject to change and tax implications will be based on your individual circumstances.

The Financial Conduct Authority does not regulate advice on taxation

FP2024-579 - last reviewed December 2024

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