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The Scottish Budget 2026–27: Key Changes and How We Can Help
Yesterday, 13 January 2026, Finance Secretary Shona Robison unveiled her final draft Budget for 2026–27 ahead of the upcoming Holyrood election. This year’s Budget brings several changes – most notably to income tax thresholds, council tax bands, and non-domestic rates. Here’s what you need to know and how we can support you.
1. Income Tax Threshold Adjustments
- Basic-rate threshold (20%) will rise from £15,398 to £16,537 (+7.4%).
- Intermediate-rate threshold (21%) increases from £27,492 to £29,527 (+7.4%).
- Higher advanced, and top rates remain unchanged (higher remains £43,663 start point).
What this means for you
– Lower and middle earners will pay less tax.
– Threshold adjustments curb fiscal drag and could open eligibility for tax-efficient planning.
2. Mansion Tax / Council Tax Bands
- Two new council‑tax bands are being introduced for properties valued over £1 million, to be implemented by April 2028.
- Specific band thresholds and surcharge levels are under consultation.
What this means for you
– Owners of high‑value residential properties might face significant increases in council tax liability starting in 2028.
– Proper valuation and timing of sales or transfers may significantly affect overall tax exposure.
3. Business Rates Reductions & Relief
- Property‑rate reductions apply to basic, intermediate, and higher bands.
- A 15% non-domestic rates relief is available in 2026–27 for retail, hospitality, and leisure premises, capped at £110,000 per business per year and totalling around £138 million over the revaluation cycle.
- The Small Business Bonus Scheme continues for the next three years, meaning more than 96% of retail, hospitality, and leisure businesses will pay zero or reduced rates.
Our Teams
Financial Services & Mortgages
For tailored advice on how the Scottish Budget may affect you or your business, contact us here.
Contributors
Anne Littlejohn, Partner
Residential Property
Matt Fraser, Trainee Solicitor
Corporate
