Forecasts of Tax Revenues, Block Grant Adjustments, Net Position and policy costings
This document sets out forecasts of revenues, Block Grant Adjustments (BGAs), and net positions for those taxes which have a corresponding BGA under the Fiscal Framework (as of the Scottish Budget 2026-27, published on 13 January 2026 ).
3. Tax policy costings
The SFC provides cost estimates of tax policy changes proposed by the Scottish Government. These costings are set out in Table 2 below (for those policies with a corresponding BGA). The figures represent the SFC’s assessment of the increase or reduction in revenue caused by a policy change, compared to the SFC’s assumed baseline position. The baselines are set out in more detail in the Tax Policy Changes section of the SFC’s forecasts referred to above. The relevant policy changes are as follows.
For Income Tax:
- Increasing the Basic and Intermediate rate thresholds by 7.4% in 2026-27.
- Assuming the freezing of the Higher, Advanced and Top rate thresholds until 2028-29.
For SLfT:
- For 2026-27, match the UK Landfill standard rate (£130.75 per tonne) and lower rate (£8.65 per tonne). The costings assume that the lower rate will then increase by the same cash amount as the standard rate in future years.
- No new contributions to the Scottish Landfill Communities Fund (SLCF) from 01 April 2026.
| (£ million) | 2026-27 | 2027-28 | 2028-29 | 2029-30 | 2030-31 |
|---|---|---|---|---|---|
| Income Tax – Basic and Intermediate threshold increases | -50 | -52 | -54 | -57 | -59 |
| Income Tax –freezes to the Higher rate threshold and above (policy change applies from 2027-28) | NA | 124 | 248 | 261 | 275 |
| Scottish Landfill Tax (both measures) | 4 | 5 | 6 | 7 | 9 |
| Total | -46 | 77 | 200 | 212 | 225 |
Figures may not sum because of rounding.
Further detail on the policy decisions is set out in the Chapter 2 of the Scottish Budget 2026-27 document[7], with further detail on the policy costings set out in the SFC’s forecasts referred to above.
The Scottish Budget also set out proposals for policies on: Non-Domestic Rates for 2026-27; introduction of new Council Tax bands for the most highly valued residential properties (to apply from 01 April 2028); and implementing Air Departure Tax from April 2027, including we how we will use the framework offered by this new Scottish tax to introduce a private jet supplement. Costings for these policies are not included in this note as these taxes either do not have a corresponding BGA (Non-Domestic Rates and Council Tax), or because detailed proposals are yet to be developed (Air Passenger Duty). No policy changes were proposed for LBTT and SAT.