MSPS have formally backed changes to Scotland’s income tax system for next year.
Scottish Finance Secretary Shona Robison insisted the “balanced” measures, outlined in the SNP Government’s Budget, would provide “stability in our tax system while delivering vital investment in our public services”.
The threshold for the higher rate, where Scots pay income tax at 42%, will remain £43,662, with the starting points for the advanced and top rates also remaining static.
Shona Robison
However, the thresholds at which people have to pay the lower basic and intermediate tax rates will rise by 7.4% in 2026-27, meaning income tax is only paid at the basic rate on earnings of £16,537 or more, while the intermediate charge applies from £29,526.
Robison said that by increasing the thresholds for the basic and intermediate rates the Scottish Government was making “an investment of over £50 million in lowering households tax bills”.
She added: “Around three quarters, 74% of tax payers are expected to be unaffected by maintaining the higher rate threshold at the same level.”
The Finance Secretary argued that the government was “asking those with broader shoulders to pay a little more to continue to delivering the public services people rightly expect”.
But she said: “Many families will feel the benefit of this government’s policies cumulatively, rather than just on income tax alone, whether it is on free prescriptions, abolishing peak rail fares, free higher education or the Scottish Child Payment.
“When combined these savings often outweigh the small annual tax differences with the rest of the UK.”
Scottish Conservative finance spokesman Craig Hoy branded the tax changes, which were approved by 93 votes to 29, a “con trick” which contain “a real stealth tax raid on middle income earners”.
He added: “By freezing the higher, advanced and top rate thresholds until 2028-29 the SNP is dragging hundreds of thousands more workers into bands they were never meant to face.
“Bands that were meant for the few are now being paid by the many.”
He insisted it was “average earning Scots – nurses, teachers and police officers” who were being “handed the bill” for Scottish Government policies.
Hoy said: “After 19 years of SNP government there is one thing Scotland’s middle earners can be certain of – they will be squeezed ever more to fill the gaps left by the SNP’s runaway spending and misplaced priorities.”
He also claimed the increase in thresholds for the lower tax rates would only give workers “a maximum of saving of £32 per year”.
The Tory blasted: “Independent analysis has called it the smallest income tax cut in history.
“And let’s be clear it is a joke from the SNP.
“It is a joke offering from a joke cabinet secretary, representing a joke government.”
Scottish Labour finance spokesman Michael Marra said his party was backing the changes, which have to be approved before Holyrood can pass the government’s Budget for 2026-27.
He said that Labour would “not stand in the way of the necessary mechanisms which will ensure our police officers, our nurses and local services continue to be funded at the start of the new financial year in only a few short weeks”.
But insisting the overall budget package was “deeply underwhelming”, he predicted: “Yet another emergency budget from whoever forms the government in May is now a racing certainty.”
