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Scottish Budget 2024/25 key points

Our Tax Manager, Jim McMahon, has pulled together the key points of yesterday’s budget below. If you require any further information or have any tax related queries please get in touch.

Tax rates

  • New 45% tax band for those earning between £75,000 and £125,140.
  • The top rate of tax, levied against those earning more than £125,000 to rise by 1% next year to 48%.
  • Three lowest rates will see no increase, while the starter and basic rate bands will increase by the level of inflation. However, the threshold for paying the higher rate tax (42%) will be kept at £43,662, dragging more taxpayers into the higher rate bracket (known as “fiscal drag”).
  • Scotland now has six tax bands

              STARTER RATE (19%)               £12,571 – £14,876

              BASIC RATE (20%)                   £14,877 – £26,561

              INTERMEDIATE RATE (21%)   £26,562 – £43,662

              HIGHER RATE (42%)               £43,663 – £75,000

              ADVANCED RATE (45%)        £75,001 – £125,140

              TOP RATE (48%)                      Above £125,140

Business and economy

  • Rates frozen for Business premises valued below £51,000.
  • Hospitality businesses on the Scottish islands given 100% rates relief – up to the value of £110,000.

Energy and environment

  • £358m of funding to accelerate plans for clean heating systems.
  • £49m investment to “make progress in Scotland’s transition to a circular economy”.

Other points

Council tax freeze

  • Councils will be given £144m worth of extra funding, equivalent to an above-inflation 5% rise.

Child poverty

  • The Scottish Child Payment will rise to £26.70 from next April – up from £25 per week.
  • Councils will be given £1.5m to eliminate school meal debt for pupils across the country.
  • Free school meals will continue for primary 1 – 5 schoolchildren, with £43m invested to extend the programme to those in primary 6 and 7.
  • Pupil equity funding to bridge poverty-related attainment gap up £130m.

Health and social care

  • NHS boards will receive a 4.3% funding rise, an additional £550m.
  • Social care, early learning and childcare workers in the private, third and independent sectors will receive a wage rise to at least £12 per hour from April 2024.

Arts and culture

  • Arts and culture funding will increase by £15.8m over the next year.

Public services

  • The Scottish Police Authority resource budget increased by £75.7m.
  • Capital funding for Police Scotland to improve estate, fleet and technology to rise to £64.5m.
  • Scottish Fire and Rescue Service to receive an additional £13.5m for resource spending and extra funding of £10.3m to improve facilities.
  • Scottish Prison Service funding rises by 10% to £38.6m and £176m has been set aside to modernise the prison estate.
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