Fiscal framework outturn report: 2026

4. Fully Devolved Taxes

31. Revenue Scotland manages and collects revenues for the fully devolved taxes LBTT and SLfT and these feed into the Scottish Budget as they are collected. This means reconciliations for revenue are not necessary as the Scottish Government manages any variance between forecast and actual revenues as part of its in-year budget management process.

32. The BGAs for these taxes undergo reconciliations in two stages. Firstly, an in-year reconciliation, which normally takes place within the same financial year, on the basis of updated OBR forecasts produced for the UK autumn fiscal event. Outturn data from HMRC then becomes available in the autumn roughly midway through the following financial year. Using these outturn figures, a final reconciliation is applied to the Block Grant in the financial year two years after the original BGA was applied.

Land and Buildings Transaction Tax

33. Table 3 shows the difference between the final outturn for LBTT revenues and the BGA compared to the forecast at the time when the Scottish Budget was set. It also shows the change to the net effect on the Budget.

Table 3: 2025-26 LBTT Outturn Compared with Forecasts (£ million)

*2025-26 LBTT Provisional revenue outturn excludes penalties and accounting adjustments applied by Revenue Scotland

34. Table 3 shows that outturn for revenues is £66.5 million lower than when the Scottish Budget was set. In addition, the BGA was £19.5 million more negative than forecast. Taken together these have the effect of reducing the net effect on the Scottish Budget by £86 million. However, the net position is still positive, contributing £272.2 million to the Scottish Budget.

35. As shown in Table 4, £7.9 million was deducted as an in-year reconciliation in 2025-26 and a further final outturn reconciliation of negative £11.7 million is required. The net effect of the in-year reconciliation and the final outturn reconciliation equates to the negative £19.5 million referenced above.

Table 4: LBTT 2025-26 BGA Reconciliation (£ million)

36. The reasons for the £66.5 million shortfall between LBTT forecast and outturn were outlined in the SFC’s Forecast Evaluation Report, 2025-26 (August 2026)^[6]. The largest source of forecast error was from the Additional Dwelling Supplement (ADS) component of LBTT. SFC forecast revenue of £258 million, but outturn was only £199 million. This was mainly due to not fully accounting for ADS reliefs in the forecast and underestimating repayments of ADS.

37. Table 5 compares the forecasts used to set the Scottish Budget 2026-27 with the latest forecasts for 2026-27 and indicates the forecast direction of change in the net position. The change in the forecasts for the BGA for LBTT reflect the difference between the BGA used in the Budget Act 2026, and the forecast of the BGA provided at the UK Spring Forecast in March 2026. As Scottish revenue forecasts have not been published since the Scottish Budget, they are unchanged in Table 5. The actual in-year reconciliation will be based on updated BGA forecasts provided alongside the next set of OBR forecasts in October 2026.

Table 5: Forecast Comparison of 2026-27 LBTT (£ million)

Scottish Landfill Tax

38. Table 6 shows that outturn for revenues is £15.6 million higher than when the Scottish Budget was set. In addition, the BGA was £37.1 million more negative than forecast. Taken together, these have the effect of reducing the net effect on the Scottish Budget by £21.5 million. The net effect of outturn is negative, reducing the funding available for the Scottish Budget by £37.7 million.

Table 6: 2025-26 SLfT Outturn Compared with Forecasts (£ million)

*2025-26 SLfT Provisional revenue outturn excludes penalties and accounting adjustments applied by Revenue Scotland

39. Table 6 shows that the difference between the BGA used to underpin the Scottish Budget 2025-26 (-£56.6 million) and the final outturn BGA (-£93.7 million) is negative £37.1 million. As shown in Table 7, £21.4 million was deducted as an in-year reconciliation in 2025-26 and a further final outturn reconciliation of negative £15.7 million is required. The net effect of the in-year reconciliation and the final reconciliation equate to the negative £37.1 million referenced above.

Table 7: SLfT 2025-26 BGA Reconciliation (£ million)

40. The reasons for the £15.6 million surplus between the SLfT forecast and outturn were briefly outlined in the SFC’s Forecast Evaluation Report, 2025-26 (August 2026)^[7]. The forecast under-estimated the amount of waste going to incineration, partly due to unexpected disruptions at some incinerators in Scotland and because the Biodegradable Municipal Waste ban was not fully enforced at the start of 2026 as assumed in the forecast. The Forecast Evaluation Report explains that both of these factors led to more waste than expected entering landfill in 2025-26.

41. Table 8 compares the forecasts used to set the Scottish Budget 2026-27 with the latest forecasts for 2026-27 and indicates the forecast direction of change in the net position. The change in the forecasts for the BGA for SLfT reflect the difference between the BGA used in the Budget Act 2026, and the forecast of the BGA provided at the UK Spring Forecast in March 2026. As Scottish revenue forecasts have not been published since the Scottish Budget, they are unchanged in Table 5. The actual in-year reconciliation will be based on updated BGAs provided alongside the next set of OBR forecasts in October 2026.

Table 8: Forecast Comparison of 2026-27 SLfT (£ million)