Here are our top tax takeaways from the Scottish Government Budget 2024/25 delivered today by Shona Robison. 

1. In among the most well-trailed tax changes from Scottish Budgets in recent times, a new rate of Scottish income tax was announced affecting income between £75,001 and £125,140. The rate will be 45%. The rate acquired a name ("Advanced"), increasing the menagerie of differentiated Scottish tax rate names by one. As in education, so in tax -"Advanced" means "Higher".

2. In a less expected change, the Scottish Top rate of tax itself advanced, by one percentage point, to 48%. The Top rate creeps closer to the figure of 50% which had been at least mentioned as a possibility in recent years; and increases the differential for those Scottish taxpayers on the highest part of their earned (or property) income from 2% to 3%. It is always worth the reminder that Scottish income tax rates only apply to Scottish taxpayers; and only on their income from employment, self-employment or land (and buildings).

3. The introduction of the new Advanced rate means that Scotland will have six rates of income tax as compared to the three rates which apply in the rest of the UK. The marginal rate of income tax payable by Scottish taxpayers on income between £100,000 and £125,140 will be 67.5%.

4. The thresholds for the Starter and (Scottish) Basic rate bands will increase in line with inflation (6.7%), while the Higher and Top rate thresholds will remain the same. The Starter band, which previously covered taxable income up to £14,732 will now extend to income up to £14,876. The (Scottish) Basic rate band will now cover income between £14,877 and £26,561.

5. The Council Tax freeze was confirmed, and it will be fully funded. The government will provide councils with additional funding equivalent to a 5% council tax increase.

6. The non-domestic rates Basic Property Rate (poundage) has been frozen at current levels, i.e. 49.8p for every £1 of rateable value. This follows the approach taken by the UK Government in the recent Autumn Statement.

7. There is to be no extension to the current reliefs for the hospitality sector generally, despite many calls for this, but a 100% relief for hospitality premises in the Scottish Islands, capped at £110,000 is to be introduced from April 2024. The Scottish Government is to work with the hospitality sector to explore targeted solutions and better promotion of existing reliefs as well as a new valuation methodology for the hospitality sector.

8. There are no changes to Land and Buildings Transaction Tax ("LBTT") rates or the Additional Dwelling Supplement (“ADS”) for either residential or non-residential transactions.

9. Legislation will be introduced to change the rates of the Scottish Landfill Tax in line with planned UK landfill tax increases. From 1 April 2024, the standard rate will increase to £103.70/tonne and the lower rate will increase to £3.30/tonne.

10. The Scottish Aggregates Tax and Devolved Taxes Administration (Scotland) Bill was introduced to the Scottish Parliament in November 2023. This will introduce a new Scottish Aggregates Tax (SAT), replacing the UK-wide aggregates levy in Scotland. It is expected to come into effect in April 2026.