On 13 January 2026, Scotland’s Finance Secretary delivered the Scottish Budget 2026–27. The Scottish Government described it as a package to support the economy and protect day-to-day public services. It also set out longer-term investment plans in areas such as transport, skills and climate action. In addition, the statement highlighted public sector reform, with an emphasis on improving outcomes and making better use of resources.
For businesses and employers, the main story is not one single “headline tax rise”. Instead, the Budget sets out several changes that will affect costs and planning over the next few years. For example, it confirms a Non-Domestic Rates (business rates) revaluation from 1 April 2026, alongside reliefs designed to limit sharp changes in bills. It also points to future changes, including Air Departure Tax from April 2027 and further reforms from April 2028.
Below are the key headlines we think businesses, employers and property-owning organisations should be aware of.
Key dates: what changes when
Some measures start quickly. Others arrive later. However, people often miss the timing when they only scan the headlines. Here are the key dates:
- From 1 April 2026: Non-Domestic Rates (business rates) revaluation changes begin, including updated poundage rates and relief arrangements.
- From 1 April 2026: Scottish Aggregates Tax is due to start (subject to legislation).
- From April 2027: Air Departure Tax is due to start.
- From April 2028: Building Safety Levy is due to start.
- From April 2028: new Council Tax bands are due to start for the highest-value homes (relevant to some owners and property businesses).
Business rates: revaluation and reliefs (Non-Domestic Rates)
Business rates can be a major overhead, especially for customer-facing premises and property-heavy organisations. This Budget links closely to the 2026 revaluation, which updates rateable values.
Poundage rates for 2026–27
The Budget sets poundage rates across three property bands:
- Basic Property Rate (up to and including £51,000 rateable value)
- Intermediate Property Rate (£51,001 to £100,000)
- Higher Property Rate (over £100,000)
In practice, your bill depends on two things:
- your rateable value (set at revaluation), and
- the poundage rate, plus any reliefs you qualify for.
Reliefs: the main ones to know about
The Budget keeps the Small Business Bonus Scheme in place for the next three years of the revaluation cycle. It aims to give smaller premises more stability.
In addition, the Budget includes targeted relief for retail, hospitality and leisure. It applies:
- a percentage relief for eligible premises up to a specified rateable value, and
- a cap per business per year.
The Budget also introduces Transitional Relief. This relief aims to cap sharp year-on-year increases in bills caused by revaluation.
As a result, the poundage rate alone does not tell the full story. Relief eligibility, and how transitional arrangements apply, can make a material difference to the final bill.
Scottish Income Tax: thresholds and take-home pay
Income tax applies to individuals rather than businesses. Even so, it often comes up in business conversations. That is because it affects take-home pay, and it can influence pay discussions over time.
For 2026–27, the Scottish Government proposes:
- an uplift to the Basic and Intermediate thresholds, and
- a freeze on the Higher, Advanced and Top thresholds.
This detail matters most for:
- employees with Scottish tax codes, and
- people close to higher thresholds, who may move into higher bands over time.
If you run payroll, your payroll software should apply the correct Scottish rates and thresholds once it updates for the new tax year. Even so, employees may still notice changes to net pay, even when their gross pay stays the same.
Council Tax: planned changes from April 2028
Council Tax sits separately from business rates. However, it can still matter for business owners personally and for property-related businesses.
The Budget signals a plan to introduce two new Council Tax bands for the highest-value homes from 1 April 2028:
- Band I for homes valued between £1 million and £2 million
- Band J for homes valued over £2 million
In addition, the Budget references changes around Council Tax premiums for second homes and long-term empty homes. Local authorities set these premiums. Therefore, it is worth watching for further detail and local decisions.
Devolved taxes: what’s on the way
The Budget also sets out a timetable for future devolved taxes. For many organisations, the key point is simply the timing.
Scottish Aggregates Tax (from April 2026)
The Budget states that Scottish Aggregates Tax is due to begin from 1 April 2026, subject to legislation. This mainly affects businesses connected to construction supply chains, quarrying and related logistics.
Air Departure Tax (from April 2027)
Air Departure Tax is due to begin from April 2027, replacing Air Passenger Duty in Scotland. The Budget also references a Private Jet Supplement due to apply from 2028–29.
Building Safety Levy (from April 2028)
The Building Safety Levy is due to begin from April 2028. This will matter most to parts of the construction and development sector, once the detail is confirmed.
Because these measures are future-dated, the practical step for many organisations is to note the timeline now. After that, keep an eye on consultations and guidance as they appear.
Environmental taxes: Scottish Landfill Tax
Landfill tax can affect cost planning in waste-intensive sectors. For example, it often matters in construction, demolition, manufacturing, facilities management and logistics.
The Budget confirms that Scottish Landfill Tax rates will rise from 1 April 2026, in line with UK Landfill Tax rates. It also flags changes to the Scottish Landfill Communities Fund. In particular, it signals an intention to close the fund to new contributions from 1 April 2026, while existing commitments continue through to the end of the funding period.
Investment priorities that may affect local economies and supply chains
Tax and rates often dominate the headlines. However, spending plans also matter. They influence demand, procurement activity and investment pipelines.
The Budget materials highlight:
- continued investment in enterprise and economic development bodies,
- support for town centre regeneration and local economies,
- skills and employability funding, and
- transport and infrastructure investment (including rail and ferry renewals and major road commitments).
Over time, many organisations feel these decisions through what happens next. For example, programmes open, grants launch, and public sector contracts go out to tender through procurement routes.
You can read our full summary here, or view the full Scottish Government Budget document here.