Tax changes to support Scotland’s vital public services

Revenue to deliver £1 billion uplift in NHS funding.

Proposed changes to a number of devolved taxes will raise additional revenue to support Scotland’s NHS and other public services, Deputy First Minster John Swinney has announced.

On Income Tax, he set out plans to add 1 pence to the Higher and Top tax rates, maintaining the Starter and Basic Rate bands at their current level, and reduce the threshold at which people pay the Top Rate, from £150,000 to £125,140. According to the Scottish Fiscal Commission (SFC), this will raise £129 million.

In addition, the Higher Rate Threshold will be maintained at its current level, increasing revenue by a further £390 million when compared to inflation according to Scottish Government estimates.

The Scottish Fiscal Commission estimates that the tax decisions made in Scotland since income tax powers were devolved could raise around £1 billion more in 2023-24 compared to the income tax policy decisions made by the UK Government.

A further £34 million is expected to be raised by increasing the Additional Dwelling Supplement from 4% to 6% from 16 December 2022, which is paid as part of Land and Buildings Transaction Tax (LBTT) on additional properties.

During his Budget statement to Parliament, the Deputy First Minister also set out plans to:

  • freeze the non-domestic rates poundage and offer transitional relief for businesses seeing the most significant increases in their rateable values following the 1 April 2023 revaluation
  • maintain the residential and non-residential rates and bands of LBTT
  • increase the standard and lower rates of Scottish Landfill Tax, which will prevent cross-border movement of waste and support ambitions for the circular economy 

Mr Swinney said:

“These tax decisions seek to strike a balance between ensuring there is enough money for public spending and acknowledging the challenging economic conditions facing households and businesses.

“The Income Tax proposals I have put forward will enhance the Scottish Government’s progressive approach to tax. Using the additional revenue raised through our tax changes will allow us to make a £1 billion uplift to the NHS budget, above and beyond the frontline health consequentials we have received from the UK Government. At the same time, the majority of people in Scotland will still be paying less in taxation than if they lived in the rest of the UK.

“On non-domestic rates, we have listened to businesses and by freezing the poundage we will deliver the lowest poundage in the UK for the fifth year in a row. This will ensure over 95% of non-domestic properties continue to be liable for a lower property tax rate than anywhere else in the UK.

“Increasing the tax due on the purchase of additional dwellings such as second homes maintains our commitment to protect housing opportunities for first-time buyers in Scotland, while also raising vital extra revenue.”


The Scottish Income Tax bands and rates proposed in the 2023-24 Budget are:


Band name


£12,571* - £14,732

Starter Rate


£14,733 - £25,688

Basic Rate


£25,689 - £43,662

Intermediate Rate


£43,663 - £125,140**

Higher Rate


Over £125,140

Top Rate


* Assumes individuals are in receipt of the standard Personal Allowance.

** Those earning more than £100,000 will see their Personal Allowance reduced by £1 for every £2 earned over £100,000.

The increase in the Land and Buildings Transaction Tax Additional Dwelling Supplement will take effect from 16 December 2022. The increase will not apply to any transaction where the contract was entered into before that date.

The standard and lower rates of the Scottish Landfill Tax will increase:

  • From £98.60 to £102.10 per tonne (standard rate) from 1 April 2023
  • From £3.15 to £3.25 per tonne (lower rate) from 1 April 2023

The most recent Scottish Social Attitudes Survey (which involved interviews with 1,130 randomly selected people) showed that 64% of people thought the level of taxation and spending on health, education and social benefits should be increased. 68% agreed that income should be redistributed from the better-off to those who are well-off.

Local authorities will set council tax rates as they consider appropriate.


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