4 Mins
The Deputy First Minister and Cabinet Secretary for Finance, Shona Robison, set out the Scottish Budget yesterday, we have summarised the key points from her speech. These are proposed changes which are still to receive approval which could take up to 2 months. We will update you as the proposals are approved.
Tax announcements
Income tax
The structure of Scottish income tax will change from 6 April 2024:
- 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 meaning 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%.
Land and buildings transaction tax (LBTT)
There will be no changes to the LBTT bands.
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.
- 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.
Other announcements
- Social security benefits and payments will rise in line with inflation, taking the Scottish Child Payment to £26.70 a week.
- NHS frontline Boards will receive an increase of over £550 million, a 4.3% funding rise.
- £556 million will be invested in the Affordable Housing Supply Programme, and over £90 million in Discretionary Housing Payments.
- £358 million will be provided to accelerate energy efficiency upgrades and installation of clean heating systems.
- Investment in digital connectivity will rise from £93 million to £140 million.
- Workers in all sectors of social care, early learning and childcare will receive a wage rise to at least £12 per hour from April 2024.
- The Scottish Police Authority’s resource budget will be increased by £75.7 million (5.6%).
- The Scottish Prison Service resource budget will receive an additional £38.6 million (10%) and there will be £167 million of capital funding to progress replacements for HMPs Inverness and Barlinnie.
- Scottish Fire and Rescue Service (SFRS) will receive an extra £13.6 million and capital investment will rise by £10.3 million (32%).