Scottish Budget 2027/28

What does the Scottish Budget control?

The Scottish Parliament can set the rates of income tax and the band thresholds above the Personal Allowance for anyone who is a Scottish taxpayer — broadly, someone whose main home is in Scotland. That covers salary, self-employed profits, pensions and rental income.

It cannot change the Personal Allowance, National Insurance, tax on dividends or savings interest, Capital Gains Tax or Corporation Tax. Those stay with the UK Government, which is why a Scottish higher-rate taxpayer still pays the UK dividend rates.

Where do the rates stand for 2026/27?

After the £12,570 Personal Allowance, Scottish taxpayers pay 19% up to £16,537, 20% up to £29,526, 21% up to £43,662, 42% up to £75,000, 45% up to £125,140 and 48% above. Someone earning about £33,500 or less pays slightly less than in the rest of the UK; above that, more.

Because the higher-rate threshold is £43,662 rather than £50,270, the 42% band arrives earlier, and that changes director salary and dividend planning, pension contribution value and the cost of a pay rise.

What to watch for 2027/28

Threshold changes matter as much as rate changes. Freezing a band while wages rise brings more people into higher bands without any headline rate rise, so compare the new thresholds with your expected income rather than looking only at the percentages.

The UK Government has said it will give the Scottish Government the ability to set its own rates on property income from April 2027, so landlords should look at the Scottish Budget for those rates as well.

How Countify uses the Scottish Budget

Our take-home, Scottish income tax and bonus calculators read from a single rate table, so when the Scottish rate resolution is confirmed every tool moves together. Clients near a threshold hear from us before April, not after.