Income tax changes and mansion tax on £1m homes in Scottish Budget

[mwai_chat context=”Let’s have a discussion about this article:nn3 hours agoShareSaveAngus CochraneSenior political journalist, BBC ScotlandShareSavePA MediaThe Scottish government has announced plans to change income tax thresholds as part of its Budget for 2026-27.Finance Secretary Shona Robison said the proposals would mean that 55% of Scottish taxpayers would pay less income tax next year than people living in the rest of the UK.Robison also announced a new tax on homes worth more than £1m and an increase in the Scottish Child Payment.While opposition MSPs welcomed some measures, they warned the Budget would not deliver wide-ranging reforms.The £68bn Budget, which sets out plans for the next financial year and beyond, comes just four months before Scots head to the polls for the Holyrood elections. While Robison said the tax and spending proposals would ensure “pressure on families and family budgets will ease”, economists said they also contained considerable cuts. How is Scottish income tax changing? Currently, people in Scotland earning less than about £30,000 pay slightly less income tax than elsewhere in the UK, but people earning more than that face progressively higher taxation.The point at which people start paying income tax is determined by the UK government.Above that the Scottish government has three lower rates – starter, basic and intermediate.Robison said she would raise the threshold of the basic and intermediate rates, meaning people will pay the lower 19% starter rate on more of their earnings.The threshold for the basic (20%) rate, currently £15,398, will go up by 7.4% to £16,537.The intermediate rate (21%), which currently starts at £27,492, will rise to £29,527.However, the higher rate (42%) will continue to kick in at £43,663, and the advanced (45%) and top (48%) rates will also remain unchanged – meaning bigger earners will be dragged into higher bands as their wages increase.Under the proposals, Scots earning more then £33,500 would pay slightly less income tax than elsewhere in the UK.Robison said the changes would mean that 55% of people would pay less in tax than they would in the rest of the UK.That projection is based on salary forecasts. In two of the past three financial years the Scottish government made similar claims, only for questions about their accuracy to be raised after lower than forecast median income figures. Robison also told parliament that two new council tax bands will be introduced from April 2028 for homes with an up-to-date valuation of more than £1m. She said the move would bring “greater fairness as well as increased revenues to councils”.Public Finance Minister Ivan McKee told BBC Radio Scotland Drivetime that the measure would generate about £14m in revenue. While the Scottish government sets the overall structure of council tax, rates are set, administered and spent by local authorities.Robison’s announcement comes after the UK government announced plans for a “mansion tax” on properties in England valued at more than £2m.Robison also announced: The Scottish Child Payment will be increased to £40 a week for families with a baby under the age of one from 2027-28There will be a 15% non-domestic rates relief in 2026-27, worth £138m over three years for retail, hospitality and leisure premisesInvestment in roads and public transport, including on the rail network, the ferry fleet and nearly £200m for the dualling of the A9 and key sections of A96£1.5bn in efficiency savings via public sector reformThe expansion of after school clubs and breakfast clubs for every primary school by August 2027A “Summer of Sport”, including free children’s sport and swimming lessons for every primary school pupilAn air departure tax on all eligible passengers, with the Highlands and Islands to be exempted. A private je …nnDiscussion:nn” ai_name=”RocketNews AI: ” start_sentence=”Can I tell you more about this article?” text_input_placeholder=”Type ‘Yes'”]