Scottish Budget: Tax Announcements

Income tax

The structure of Scottish income tax will change in 2024/25:

  • The starting levels for basic and intermediate rate tax were increased in line with inflation (6.7% to September 2023).
  • The higher rate threshold will be frozen and the size of the band will contract.
  • A new advanced rate band, at a rate of 45%, will be introduced on income between £75,000 (£62,430 + £12,570 personal allowance) and the starting point of the top rate of tax, which remains at £125,140.
  • The top rate of tax will be increased from 47% to 48%.
Scottish taxpayers – non-dividend, non-savings income2024/252023/24
Tax Rate Tax Rate 
Starter rate on taxable income up to19%£2,30619%£2,162
Basic rate on next slice up to20%£13,99120%£13,118
Intermediate rate on next slice up to21%£31,09221%£31,092
Higher rate on next slice up to42%£62,43042%£125,140
Advanced rate on next slice up to45%£125,140N/AN/A
Top rate on income over48%£125,14047%£125,140

Land and buildings transaction tax (LBTT)

There will be no changes to the LBTT bands.

Land and buildings transaction tax (LBTT) on slices of value
Residential property%Commercial property%
Up to £145,0000Up to £150,0000
£145,001 – £250,0002£150,001 – £250,0001
£250,001 – £325,0005Over £250,0005
£325,001 – £750,00010  
Over £750,00012  
First-time buyers: 0% on first £175,000 Additional residential and all corporate residential properties £40,000 or more:  add 6% to rates

Scottish council tax rates

As previously announced, for 2024/25 the Scottish Government will freeze council tax rates.

Scottish non-domestic rates

New rateable values were introduced from April 2023, based on property values as at
1 April 2022. However, the poundage for 2023/24 was frozen at 2022/23 levels. For 2024/25 the poundage rate will be frozen again for businesses subject to the Basic Property Rate (those with rateable values of up to and including £51,000), while the poundage for the Intermediate and Higher Property Rates will rise in line with inflation to 54.5p and 55.9p respectively.

100% relief will apply in 2024/25 for hospitality businesses located on islands as defined by the Islands (Scotland) Act 2018 (capped at £110,000 per business). The Cabinet Secretary for Finance said that work with the hospitality sector, in the New Deal for Business Non-Domestic Rates sub-group, would continue on the sector’s long-term issues.

Other non-domestic rate measures included:

  • Extending 90% renewables District Heating relief until 31 March 2027, and expanding it to include all district heating networks, where at least 80% of the thermal energy generated derives from renewables.
  • Replacing the planned end of Enterprise Areas relief on 31 March 2024 with a phasing out over the following two years.
Rateable Value2023/242024/252025/26
£120,000 or less100%66.7%33.3%
£120,001 to £240,00050%33.3%16.7%
£240,001 to £480,00025%16.7%8.3%
£480,001 to £1,200,00010%6.7%3.3%
£1,200,001 to £2,400,0005%3.3%1.7%
Over £2,400,0002.5%1.7%0.8%
  • All other existing reliefs will continue in 2024/25, including the multi-year transitional relief schemes announced in last year’s Budget.

Scottish landfill tax

The standard rate of Scottish landfill tax will increase from £102.10 a tonne to £103.70 a tonne and the lower rate from £3.25 a tonne to £3.30 a tonne from 1 April 2024 to maintain consistency across the UK.

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