Quick Summary
- Income tax bands adjusted but rates unchanged — all 6 rates stay the same (19% to 48%), but band thresholds have been updated to reflect inflation
- ADS increased to 8% — the Additional Dwelling Supplement on second properties rose from 6% to 8% in December 2024, adding thousands to buy-to-let costs
- Scottish benefits maintained — Scottish Child Payment stays at £26.70/week, Best Start Grant and Winter Heating Payment continue
- Use our free calculator — the Scottish Income Tax Calculator is updated with all 2025/26 rates
The Scottish Budget determines income tax rates, LBTT thresholds, and devolved benefit levels for the coming tax year. Here's what the 2025/26 Budget means for Scottish taxpayers — and crucially, what stayed the same as last year.
Quick Answer: For 2025/26, Scotland's six income tax rates are unchanged (19% Starter to 48% Top), but band thresholds have been adjusted. The biggest change is the Additional Dwelling Supplement rising from 6% to 8% — adding £4,000 to the tax bill on a £200,000 second property. Scottish benefits like the Child Payment (£26.70/week) continue. Personal Allowance remains frozen at £12,570 (set by Westminster). Use our Scottish Income Tax Calculator to see your updated bill.
Income tax: rates unchanged, thresholds adjusted
The headline rates for 2025/26 remain identical to 2024/25:
| Band | Range (2025/26) | Rate |
|---|---|---|
| Personal Allowance | Up to £12,570 | 0% |
| Starter | £12,571 – £15,397 | 19% |
| Basic | £15,398 – £27,491 | 20% |
| Intermediate | £27,492 – £43,662 | 21% |
| Higher | £43,663 – £75,000 | 42% |
| Advanced | £75,001 – £125,140 | 45% |
| Top | Over £125,140 | 48% |
The band thresholds have been adjusted slightly to reflect inflation, which means a small reduction in the "fiscal drag" effect of frozen thresholds. However, the Personal Allowance (£12,570) remains frozen — this is set by the UK Government, not Scotland, and has been unchanged since 2021/22.
What the frozen Personal Allowance means
The Personal Allowance freeze is the single biggest factor pushing Scottish taxpayers into higher bands. As wages rise with inflation but the £12,570 threshold stays fixed, more of your income falls into taxable bands. A pay rise that merely keeps pace with inflation still increases your tax bill — sometimes pushing you into a higher band entirely.
This affects Scotland more than England because Scotland has more bands with higher rates. An English taxpayer pushed from the Basic band into the next pays 40% (Higher). A Scottish taxpayer pushed from Intermediate into Higher pays 42% — and gets there £6,608 sooner.
Try it yourself
See your exact 2025/26 tax bill across all 6 Scottish bands with our updated calculator.
Open Scottish Income Tax CalculatorNo sign-up required.
LBTT: standard bands unchanged, ADS up sharply
The standard LBTT residential bands remain unchanged for 2025/26:
| Band | Rate |
|---|---|
| Up to £145,000 | 0% |
| £145,001 – £250,000 | 2% |
| £250,001 – £325,000 | 5% |
| £325,001 – £750,000 | 10% |
| Over £750,000 | 12% |
First-time buyer relief also stays the same, with the nil rate band extended to £175,000.
The ADS increase: 6% to 8%
The biggest property tax change is the Additional Dwelling Supplement. From 5 December 2024, the ADS rate increased from 6% to 8% on all additional residential property purchases over £40,000. This is a flat charge on the entire purchase price — not just the excess.
| Purchase price | Old ADS (6%) | New ADS (8%) | Increase |
|---|---|---|---|
| £150,000 | £9,000 | £12,000 | +£3,000 |
| £200,000 | £12,000 | £16,000 | +£4,000 |
| £250,000 | £15,000 | £20,000 | +£5,000 |
| £300,000 | £18,000 | £24,000 | +£6,000 |
| £500,000 | £30,000 | £40,000 | +£10,000 |
For buy-to-let investors, this is a significant cost increase. On a £200,000 property, the ADS alone is now £16,000 — compared to £10,000 for England's equivalent 5% surcharge. Scotland is now substantially more expensive for property investors.
Scottish benefits for 2025/26
Scotland's devolved benefits continue at current rates:
| Benefit | Amount | Frequency |
|---|---|---|
| Scottish Child Payment | £26.70 per child | Weekly |
| Best Start Grant — Pregnancy & Baby | £707.25 (first child) | One-off |
| Best Start Grant — Early Learning | £294.70 | One-off |
| Best Start Grant — School Age | £294.70 | One-off |
| Carer's Allowance Supplement | £288.15 | Twice yearly |
| Winter Heating Payment | £58.75 | Annual |
The Scottish Child Payment remains one of Scotland's most significant policy differences from the rest of the UK. At £26.70/week per qualifying child, a family with two children receives £2,776/year — money that has no direct equivalent in England.
National Insurance: unchanged (UK-wide)
NI rates are set by Westminster, not Holyrood, and remain:
| Band | Rate |
|---|---|
| Below £12,570 | 0% |
| £12,571 – £50,270 | 8% |
| Above £50,270 | 2% |
Employer NI is 15% above a secondary threshold of £9,100.
What stayed the same
Several elements are UK-wide and unchanged for 2025/26:
- Personal Allowance: £12,570 (frozen since 2021)
- VAT: 20%
- Corporation Tax: 25%
- Capital Gains Tax: 18%/24% (residential property), 10%/20% (other assets)
- Pension Annual Allowance: £60,000
- ISA Allowance: £20,000
- Student Loan Plan 4 threshold: £32,745
Winners and losers
Who benefits
- Low earners (under ~£30,300): The 19% Starter rate still gives a small advantage over England's 20%
- Families with children on qualifying benefits: Scottish Child Payment continues at £26.70/week
- First-time buyers under £175,000: LBTT relief unchanged, still zero tax
- State Pension recipients: Triple lock increase means higher State Pension
Who pays more
- Buy-to-let investors: ADS increase from 6% to 8% adds thousands per purchase
- Higher earners (above £43,663): Band thresholds barely moved while wages rose, pushing more income into higher bands
- Earners between £100,000 and £125,140: The frozen PA continues the 67.5% effective rate trap
- Second-home buyers: Same ADS increase as buy-to-let
Try it yourself
Compare your exact tax bill in Scotland vs England with our side-by-side calculator.
Open Scotland vs England ComparisonNo sign-up required.
Impact at different salary levels
Here's how your 2025/26 tax bill compares to 2024/25 and to England:
| Salary | 2025/26 Scottish tax | vs 2024/25 | vs England 2025/26 |
|---|---|---|---|
| £25,000 | £2,362 | Similar | -£4 less |
| £35,000 | £4,532 | Similar | +£240 more |
| £50,000 | £9,013 | Similar | +£1,527 more |
| £75,000 | £19,513 | Similar | +£1,900 more |
| £100,000 | £30,763 | Similar | +£1,900 more |
The "similar" column reflects that rates didn't change — only threshold adjustments mean minor shifts. The main movement year-on-year comes from the frozen Personal Allowance, which drags slightly more income into taxable bands as nominal wages rise.
What to expect next
The next Scottish Budget is expected in December 2025, setting rates for 2026/27. Key areas to watch:
- Will the Advanced and Top rates increase further? The Scottish Government has signalled willingness to raise rates on higher earners
- Will LBTT thresholds change? The standard nil rate band (£145,000) hasn't moved in years despite house price inflation
- Personal Allowance: The UK Government may finally unfreeze the PA after 2027/28, which would benefit Scottish taxpayers too
- ADS: No further changes expected in the near term after the December 2024 increase
Frequently Asked Questions
When does the Scottish Budget take effect?
The Scottish Budget is typically announced in December, with income tax rates taking effect from 6 April the following year. LBTT changes can take effect immediately or from a specified date (as with the ADS change on 5 December 2024).
Does the Scottish Government set the Personal Allowance?
No. The Personal Allowance (£12,570) is set by the UK Government and applies across the whole UK. Scotland only controls income tax rates and bands above the Personal Allowance. The frozen PA is a Westminster decision.
Did council tax change in the 2025/26 Budget?
Council tax rates are set by individual councils, not the Scottish Budget. However, the Scottish Government can impose caps on council tax increases, which it has done in recent years. Check with your local council for 2025/26 rates.
How does the ADS increase affect existing landlords?
The 8% ADS only applies to purchases completed on or after 5 December 2024. Existing landlords who bought before that date paid the old 6% rate. The increase only affects future additional property purchases.
Can I reduce my Scottish tax bill?
The most effective methods are pension contributions (up to £60,000/year), salary sacrifice (saves NI too), and maximising your ISA allowance (£20,000 tax-free). For earners between £100,000 and £125,140, pension contributions are particularly valuable as they can restore your Personal Allowance. See our salary sacrifice guide and 60% tax trap article.
Related Articles
- Scottish Income Tax Rates 2025/26 — all 6 bands explained in detail
- Scotland vs England Tax Comparison — full side-by-side at every salary
- Additional Dwelling Supplement Guide — the 8% ADS explained
- Scottish Benefits Guide — all Scotland-only payments and how to claim
- Take-Home Pay Calculator — see your exact 2025/26 net pay
This article is for informational purposes only and does not constitute financial, tax, or legal advice. Tax rates and thresholds can change — always verify current rates with Revenue Scotland, HMRC, or mygov.scot, and speak to a qualified financial adviser for advice specific to your circumstances.
Sources: Scottish Government — Scottish Budget 2025/26, Scottish Government — Scottish Income Tax, Revenue Scotland — LBTT rates and ADS, Social Security Scotland — Benefits