CIOT response to Scottish Budget

Sean Cockburn, Chair of the CIOT’s Scottish Technical Committee, said:

“After two years where existing tax rates have been increased and new ones introduced, taxpayers will welcome the fact that rates will remain as they are until the end of this parliament.

“Divergence remains, but it has been eased for some Scottish taxpayers by the decision to increase the basic and intermediate rate thresholds.

“From next April, the point where Scots start paying more income tax than someone on the same salary south of the border will increase to £30,318.

“Those with earnings below this will save up to £28.27 per year compared to if they lived elsewhere in the UK.

“Freezing the higher, advanced and top rate thresholds is likely to mean that fiscal drag brings more people into these bands as wages rise.

“Businesses now face a combination of the impact of income tax divergence on their ability to recruit and retain staff plus the added costs of the UK-wide decision to increase employer national insurance contributions and lower the threshold that these start to be paid”.

ENDS

^{The following table shows the expected income tax liabilities for Scottish and UK taxpayers in the coming tax year (2025/26) and the difference in Scottish tax liabilities between 2024/25 and 2025/26.}