Scottish Tax Plans Boost Low Earner Thresholds, Add High-Value Bands

Finance Secretary Shona Robison unveiled the Scottish Government's tax and spending plans on Tuesday, announcing increases to income tax thresholds for lower earners while introducing new council tax bands for high-value properties, effective from April 2028. The measures, outlined in Holyrood ahead of the May 2025 election, aim to provide relief for modest incomes amid ongoing fiscal pressures, though they are projected to generate additional revenue through frozen higher thresholds.

Under the proposals, the basic rate threshold, currently set at £15,398, will rise by 7.4 percent to £16,537, allowing more income to be taxed at the 19 percent starter rate rather than the 20 percent basic rate. The intermediate rate threshold, now at £27,492, will increase to £29,526, benefiting those earning up to that level with a 21 percent rate instead of higher bands. Higher thresholds remain unchanged: the 42 percent advanced rate starts at £43,662, the 45 percent higher rate at £75,000, and the top 48 percent rate at £125,140. Scotland's six-band income tax system, established through previous budgets, diverges from the rest of the UK since 2017.

The changes are expected to cost the...