Article
Scottish Budget 2026-27
Shona Robison, Scotland’s Finance Secretary, has presented the Scottish Government’s proposed tax and spending plans for the 2026-27 fiscal year. The Scottish Budget unusually took place after Christmas this year, due to the later UK-wide Autumn Budget in November 2025.
Last updated 12 Jan 2026 | First published 12 Jan 2026
By Helen Wood, CA 3 min read
The Budget
Income tax bands
The Scottish Government announced above inflation increases to the basic and intermediate bands of 7.4%. Higher, advanced and top rate thresholds remain frozen and the personal allowance and savings and dividend rates are set by the UK Government. The proposed new rates and bands are below for comparison:
| 2025/26 | 2026/27 | |||
| Band | Rate | Band | Rate | |
| Starter | £12,571*- £15,397 | 19% | £12,570 - £16,537 | 19% |
| Basic | £15,398 - £27,491 | 20% | £16,538 - £29,526 | 20% |
| Intermediate | £27,492 - £43,662 | 21% | £29,527 - £43,662 | 21% |
| Higher | £43,663 - £75,000 | 42% | £43,663 - £75,000 | 42% |
| Advanced | £75,001 - £125,140** | 45% | £75,001 - £125,140 | 45% |
| Top | Over £125,140 | 48% | Over £125,140 | 48% |
*Assumes individuals are in receipt of the standard Personal Allowance.
**Those earning more than £100,000 will see their Personal Allowance reduced by £1 for every £2 earned over £100,000.
Non-domestic rates (business rates)
Small Business Bonus Scheme
This relief is staying in place for a further three years. Shootings and deer forests will be excluded from the relief from 1st April 2026, subject to a few limited exceptions. Existing exclusions e.g. payday lenders, car parks and betting shops remain in place.
Retail, hospitality and leisure premises
A 15% relief against non-domestic rates is available for the next three years for those on basic or intermediate property rates. This relief is capped at £110,000 per year. The Scottish government awaits further announcements from the UK government on support for pubs.
There will be 100% relief for retail, hospitality and leisure premises on Islands* and in Cape Wrath, Knoydart and Scoraig.
*As defined by the Islands (Scotland) Act 2018
Property taxes
Council Tax
A new ‘mansion tax’ on higher valued domestic properties was also proposed. This will be achieved by a revaluation of certain residential properties, targeting houses worth more than £1m. It is understood this will be achieved by reassessing properties in the current top two bands and then creating two new bands.
Land and Buildings Transaction Tax – no change
No changes to Land and Buildings Transaction Tax, the Additional Dwelling Supplement or First Time Buyer Relief. However, a review of LBTT is underway as well as a review of non-residential leases and the impact of ADS.
Transport taxes
Air Departure Tax (ADT) begins on 1st April 2027 and will replace the UK wide Air Passenger Duty (APD) in Scotland. A private jet supplement will be added in 2028/29 which means that higher rates of tax will be paid by those who choose to travel on private jets.
The Scottish and UK governments are working on creating exemptions to ADT for Highlands and Islands flights to Scottish and other UK airports but plan to remove existing APD exemptions for international flights from the Highlands and Islands.
Scottish Landfill Tax
Scottish Landfill Tax (SLfT) will increase from 1st April 2026 to align with the equivalent UK tax, UK Landfill Tax.
- Standard rate to £130.75 per tonne (currently £126.15 per tonne); and
- Lower rate to £8.65 per tonne (currently £4.05 per tonne).
Scottish Aggregates Tax
This new tax will begin on 1st April 2026 at £2.16 per tonne and will be aligned with UK Aggregates Levy for Year 1. Previously Scottish taxpayers were subject to the UK Aggregates Levy.
Keep up to date with future announcements
Members of the Scottish Parliament will vote on the Budget bill in the coming months and whether the items proposed in this Budget will be passed remains to be seen. You can get further detail on the Scottish Government’s proposals here.
Stay up to date with the latest Government announcements affecting you and your business by signing up to our newsletter here.
Last updated 12 Jan 2026 | First published 12 Jan 2026
This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.
Helen Wood, CA
Helen is a qualified chartered accountant (CA) and joined TaxAssist in 2025 following three years as a freelance content writer for clients in the tax and accounting publishing sector. Prior to this, She spent 17 years at Big Four and Top 10 accountancy firms. Helen writes clear and helpful articles on tax and accounting for businesses and individuals.
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