1. Income Tax rates remain unchanged as do the higher rate and additional rate thresholds, but increases to the starter and the basic rate bands mean that Scottish employees with income of less than £27,850 are better off than anywhere else in the UK, while employees earning more than £27,850 are worse off. An employee on £50,270 is worse off by £1,545.80.

2. It is worth remembering that the income affected by these rates is also chargeable to NIC contributions. The thresholds for NIC rates are linked directly to UK income tax thresholds, which means there is a slice of income for Scottish taxpayers that is subject to a very high marginal rate of overall deductions.

3. The 100% rates relief for the retail, hospitality and leisure sectors will end on 31 March 2022, with a 50% relief continuing for the first three months of 2022-23, capped at £27,500 per ratepayer. The poundage has been increased by 0.8p to 49.8p, a less than inflationary increase, which gives Scotland the lowest poundage rate in the UK.

4. In view of the pandemic, Council Tax rates were frozen for 2021-22, but for 2022-23, councils will have complete flexibility to set Council Tax rates.

5. No changes were announced to the residential and non-residential rates and bands of LBTT. However, it should be noted that the UK Government is consulting on changes to the SDLT treatment of ‘mixed property’ and availability of multiple dwellings relief. We expect that if any changes are introduced for SDLT, the Scottish Government will look closely at replicating them in LBTT.

6. The Scottish Government will shortly launch a call for evidence on the operation of Additional Dwelling Supplement (ADS). There is no suggestion that the 4% surcharge on additional dwellings will be discontinued. Instead, views will be sought on its application in practice amid the many concerns that have been flagged by taxpayers and stakeholders.

7. The standard rate of Scottish Landfill Tax will increase to £98.60 per tonne and the lower rate to £3.15 per tonne in 2022-23, maintaining consistency with Landfill Tax charges in the rest of the UK.

8. Scotland’s first Framework for Tax will be published later this month setting out the Scottish Government’s approach to the design and delivery of tax policy in Scotland.

9. Devolution of Air Passenger Duty to Scotland continues to be deferred. The Scottish Government remains committed to introducing Air Departure Tax (ADT) when a solution to the Highlands and Islands exemption issue has been found.

10. The devolved Aggregates Levy – for which enabling legislation has been in place since 2016 – looks set to be introduced in the next few years, with the Scottish Government undertaking to introduce the necessary legislation during this parliamentary session.

11. Assignment of the first 10p of VAT receipts to the Scottish Government has been postponed due to current economic uncertainties and will be reviewed as part of the wider review of the Fiscal Framework.


Isobel d'Inverno

Director of Corporate Tax

Alan Barr


Neil Ritchie

Director of Personal Tax

Leigh Gould