Ahead of the Scottish Budget, there were rumours that tax hikes were on the way. However, the announcements made on the day will see some easing of tax for lower earners. What’s the full story?
On 4 December the Scottish government published its 2025 Budget, which included the proposed income tax rates for 2025/26. The good news is that the feared changes didn’t materialise. Instead there was some easing of tax for those on lower incomes. The proposed income tax rates for 2025/26 are as follows:
Band Income range Rate:
| Band | Income Range | Rate |
|---|---|---|
| Starter rate (on income exceeding tax reliefs and allowances) | £12,571 - £15,397 | 19% |
| Basic rate | £15,398 - £27,491 | 20% |
| Intermediate rate | £27,492 - £43,662 | 21% |
| Higher rate | £43,663 - £75,000 | 42% |
| Advanced rate | £75,001 - £125,140 | 45% |
| Top rate | Above £125,140 | 45% |
If the changes are approved by the Scottish Parliament, they will mean the Starter and Basic bands increase above inflation, by 22.6% and 6.6% respectively. The document also pledges that no new bands will be introduced, and no further changes to rates will be made by the current Parliament.
This article has been reproduced by kind permission of Indicator – FL Memo Ltd. For details of their tax-saving products please visit www.indicator-flm.co.uk or call 01233 653500.