Scottish Budget for 2024-25

Scottish Deputy First Minister Shona Robison announced the draft Scottish Budget for 2024-25 on 19 December 2023. A new Income Tax Advanced Rate of 45% will be introduced, meaning that, for example, a person with dividend income alongside employment, self-employment or rental income, has up to ten Income Tax rates to consider. 

Under the devolution of taxes, the Scottish government can set its own rates and allowances for various taxes, including Income Tax, Land and Buildings Transaction Tax (LBTT) and Scottish Landfill Tax.

Income Tax

Scottish Income Tax is payable by Scottish taxpayers on non-savings non-dividend income.

Proposed from 6 April 2024: 

• The Starter and Basic Rate bands will be increased by inflation to £14,876 and £26,561 respectively.
• A new Advanced Rate of 45% will be added for income over £75,000 (to £125,140).
  • Around 154,000 individuals, the highest earning 5% of Scottish taxpayers, are expected to pay up to £1,881 more tax from the introduction of the new 45% Advanced rate band.
• The Top Rate will increase from 47% to 48%.
• All other rates and thresholds will remain at 2023-24 levels.

The proposed new rates and bands (assuming individuals receive the standard UK personal allowance) from 2024-25 are: 

Land and Buildings Transaction Tax (LBTT) 

The Land and Buildings Transaction Tax (LBTT) is the Scottish equivalent to Stamp Duty Land Tax (SDLT), paid on purchase of land and property in Scotland.

• Residental and non-residential Rates and bands of LBTT will be maintained at their current levels for 2024-25. 
• First-time buyer relief will continue as it currently operates. 
• The Additional Dwelling Supplement (ADS) will continue to be charged at 6%. 
• Legislation will be introduced for various amendments to the ADS including;
  • Extending the timelines for the ADS.
  • Addressing concerns about certain scenarios involving joint buyers.
  • Extending the scope of residential LBTT relief for local authorities.

Scottish Landfill Tax (SLT) 

• From 1 April 2024, the standard rate of SLT will increase to £103.70 (2023-24: £102.10) per tonne and the lower rate of SLT will increase to £3.30 (2023-24: £3.25) per tonne. 

Non-domestic rates

• The Basic Property Rate (poundage) will be frozen at 49.8p (2023-24: 49.8p). 
• The Intermediate Property Rate rises by inflation to 54.5p (2023-24: 51.1p).
• The Higher Property Rate also rises by inflation, to 55.9p (2023-24: 52.4p).
• 100% relief will be given in 2024-25 for hospitality businesses located on islands as defined by the Islands (Scotland) Act 2018, capped at £110,000 per business.
• The Small Business Bonus Scheme will be maintained. 
• The 90% renewables District Heating relief will be extended to 31 March 2027 and expanded to include all district heating networks where at least 80% of the thermal energy generated derives from renewables.
• Enterprise Areas relief, which was due to expire on 31 March 2024, will be phased out over 2024-25 and 2025-26.
• Telecommunications mast relief will be extended from 31 March 2029 to 31 March 2031.

Other announcements and updates

Air Departure Tax

• The Scottish Government remains committed to introducing an Air Departure Tax (ADT).

Scottish Aggregates Tax

• The Aggregates Tax and Devolved Taxes Administration (Scotland) Bill, which was introduced to Parliament in November 2023, makes provision for a Scottish Aggregates Tax.
• If this Bill is enacted, and the necessary secondary legislation is approved by the Scottish Parliament, the Scottish Government intends that a Scottish Aggregates Tax will be introduced on 1 April 2026.

Building Safety Levy

• The Scottish Government is seeking the transfer of powers to introduce a devolved Building Safety Levy, equivalent to the UK Government’s Building Safety Levy for England.

Cruise Ship Levy 

• The Scottish Government will continue to work with COSLA and local authorities to scope their request that councils be given the discretionary power to introduce a Cruise Ship Levy.
• It is being explored whether such a levy can be included in the Visitor Levy Bill or another legislative vehicle this parliamentary session.

Carbon Emissions Land Tax 

• Proposals for a Carbon Emissions Land Tax will be considered.

Useful guides on this topic

Scottish Income Tax
From 6 April 2016, Scotland set its Income Tax rates. What is the rate of Scottish Income Tax? What implications does it have?

Scottish Income Tax: Am I a Scottish taxpayer?
Who does Scottish Income Tax apply to? Am I resident in Scotland? What constitutes a residence and the 'main' residence?

LBTT: Land and Buildings Transaction Tax
What is Land and Buildings Transaction Tax (LBTT)? What are the rules?

LBTT: Additional Dwelling Supplement
What is the Additional Dwelling Supplement for the Land and Buildings Transaction Tax? When does it apply? 

External links

Scottish Budget 2024-25: Deputy First Minister statement

Scottish Budget: 2024-25

Scottish Income Tax 2024-25: factsheet