On Tuesday 19 December 2023, the Deputy First Minister published the Scottish Budget for 2024-2025. For ease of reference, we have listed the main tax changes below: 

1. Income Tax Rates for Scottish Taxpayers

The headline announcement is a new income tax band, coined the "Advanced Rate" band which is set at 45% and will apply on incomes between £75,000 and £125,140.

In addition, the top rate band will increase by 1%, now set at 48% on income over £125,140.

There are slight adjustments to the income range to which the starter and basic rate apply – the starter rate threshold has been extended by £144 (0.98%) to £14,876 with the basic rate threshold extended by £873 (3.4%).

These changes will take effect from 6 April 2024 and the Income Tax bands and rates will be as follows:

These rates apply to Scottish taxpayers.

2. Non-Domestic Rates on Scottish Properties

Non-Domestic Rates (NDR) are often referred to as "business rates" and are a tax on non-domestic property to fund local council services.

The NDR payable is calculated by multiplying the rateable value of the property by a tax rate known as "poundage". The poundage rate applicable to properties with a rateable value up to £51,000 (the basic rate) will be frozen to protect small businesses from inflation. Freezing the basic rate will mean that Scotland has the lowest basic property rate in the UK.

The intermediate and higher property rates will increase with inflation and the NDR rates from 1 April 2024 will be:

3. Island Hospitality NDR Relief

To recognise the challenges faced by the hospitality sector in island communities, the Scottish Government will offer a 100% relief from NDR for hospitality businesses located on islands, capped at £110,000 per business. This will be available from 1 April 2024.