On 4 December 2024, Shona Robison, the Cabinet Secretary for Finance, presented Scotland's Budget for 2025-2026. The policy set out in this Budget is proposed to take effect from the start of the tax year on 6 April 2025. The key tax measure affecting payroll is a proposed 3.5% increase in the income thresholds for the starter, basic, and intermediate tax rates.
The updated thresholds are summarised in the table below:
|
|
Tax Rate |
Annual Taxable Income (2024-2025) |
Annual Taxable Income (2025-2026) |
|
Starter rate |
19% |
£12,571* to £14,876 |
£12,571* to £15,397 |
|
Basic rate |
20% |
£14,877 to £26,561 |
£15,398 to £27,491 |
|
Intermediate rate |
21% |
£26,562 to £43,662 |
£27,492 to £43,662 |
|
Higher rate |
42% |
£43,663 to £75,000 |
£43,663 to £75,000 |
|
Advanced rate |
45% |
£75,001 to £125,140 |
£75,001 to £125,140 |
|
Top rate ** |
48% |
Over £125,140 |
Over £125,140 |
*Assumes individuals receive the Standard UK Personal Allowance.
**Those earning more than £100,000 will see their Personal Allowance reduced by £1 for every £2 earned over £100,000.
Click here to access the full Budget document.