Hospital in Edinburgh

Public services supported by tax changes

The Scottish Government has announced proposed changes to a number of taxes, in order to support the NHS and other vital public services.

The Deputy First Minister plans to add 1 pence to the Higher and Top tax rates when it comes to Income Tax, whilst maintaining the Starter and Basic rates at their current level. This will raise around £129 million worth of funding for the government to fund public services. Alongside this, the Higher Rate Threshold will continue at its current level, which will add an extra £390 million worth of revenue, when compared to inflation.

The Additional Dwelling Supplement is also set to increase, from 4% to 6%, from today. This is expected to raise a further £34 million.

With all these developments, the First Minister also announced plans to:

  • Freeze the non-domestic rates poundage and offer transitional relief for businesses seeing the most significant increases their rateable values following the 1st April 2023 revaluation.
  • Maintain the residential and non-residential rates and bands of LBTT.
  • Increase the standard and lower rates of Scottish Landfill Tax which will prevent cross-border movement of waste and support ambitions for the circular economy.

Deputy First Minister John Swinney said:

“These tax decisions seek to strike a balance between ensuring there is enough money for public spending and acknowledging the challenging economic conditions facing households and businesses.

“The Income Tax proposals I have put forward will enhance the Scottish Government’s progressive approach to tax. Using the additional revenue raised through our tax changes will allow us to make a £1 billion uplift to the NHS budget, above and beyond the frontline health consequentials we have received from the UK Government. At the same time, the majority of people in Scotland will still be paying less in taxation than if they lived in the rest of the UK.

“On non-domestic rates, we have listened to businesses and by freezing the poundage we will deliver the lowest poundage in the UK for the fifth year in a row. This will ensure over 95% of non-domestic properties continue to e liable for a lower property tax rate than anywhere else in the UK.

“Increasing the tax due on the purchase of additional dwellings such as second homes maintains our commitment to protect housing opportunities for first-time buyers in Scotland, while also raising vital extra revenue.”

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