Scottish Budget - provisional outturn 2024-2025: briefing note - 24 June 2025

Scottish Income Tax

6. The Scottish Parliament set the following rates and bands of Scottish Income Tax for 2024-25:

7. For 2024-25 we have used the Scottish Fiscal Commission’s forecast for Scottish Income Tax receipts of £18.844 billion which they produced in November 2023 to support the annual budget.

8. According to the latest Scottish Fiscal Commission/Office for Budget Responsibility forecasts, the net position in 2024-25 is expected to have reduced to +£562 million At the time the 2024-25 Scottish Budget was set the net position was forecast to be +£1,412 million when the budget was set. This means there has been an £850 million reduction in the net forecast for Scottish Income Tax and the corresponding Block Grant Adjustment. However, this forecast improvement has no impact on our spending power in 2024-25 as final figures for Income Tax are “locked in” until outturn becomes available. Should final outturn figures turn out to be higher or lower than originally forecast, the impact will be deferred to the 2027-28 Budget via the reconciliation process.

9. Whilst there has continued to be strong growth in income tax receipts the relative performance against the rest of the UK has decreased since the original budget position. Consequently, we do therefore expect a significant negative reconciliation in 2027-28.