London Daily

Focus on the big picture.
Friday, Jun 26, 2026

Higher earners in Scotland to pay more income tax

Higher earners in Scotland to pay more income tax

Everyone earning more than £43,662 in Scotland will have to pay more income tax next year.

Deputy First Minister John Swinney said the higher rate of tax will increase from 41p to 42p in the pound in April, and the top rate from 46p to 47p.

The tax threshold for the top rate will also be lowered from £150,000 to £125,140.

This change has already been announced for other parts of the UK by Chancellor Jeremy Hunt.

Mr Swinney described the increase as an "extra penny to enable spending on patient care in our National Health Service".

And he said he was asking people to "pay their fair share" so they could "help to create the fairer society in which we all want to live".

But the Scottish Conservatives said making higher and middle earners in Scotland pay more more tax than their counterparts elsewhere in the UK risked undermining the country's potential for economic growth.

Scottish Labour said the extra money would be used to "fix some of the damage done by 15 years of SNP cuts and failure" and predicted that people will not accept rising tax bills "if all they see is further decline in services".

Mr Swinney had been due to deliver his budget statement at 14:30 - but Presiding Officer Alison Johnstone suspended the session for 30 minutes so she could investigate how details of the tax rises had been revealed by the BBC two hours earlier.

Ms Johnstone later allowed Mr Swinney to speak after receiving "categoric assurance" from him and First Minister Nicola Sturgeon that the information had not been shared by the government.

Income tax rates in Scotland, as well as several other taxes, are set by the Scottish government rather than at Westminster.

About 500,000 people in Scotland are in the higher rate bracket while a further 33,000 pay the top rate of income tax, according to the government.

The threshold for the 41p higher rate will remain frozen at £43,663 in Scotland - lower than the £50,271 elsewhere in the UK.

And there will be no changes to the rate paid by lower earners, with First Minister Nicola Sturgeon previously saying this would be counterproductive in a cost of living crisis.

The changes mean that everyone earning more than that threshold will pay more income tax than they did last year, and more than people earning the same salary elsewhere in the UK.

*  Scots earning less than £27,850 will pay a maximum of £21.62 less tax than someone in the rest of the UK next year

*  Someone earning £50,000 in Scotland will pay an extra £63.38 in tax compared with this year, and £1,552 more per year than someone on the same salary elsewhere in the UK

*  Anyone earning £150,000 in Scotland will pay an additional £2,432.08 compared to this year, which will be £3,857 more than someone earning the same salary elsewhere in the UK

The increases are a significant departure from the SNP's manifesto aim not to alter income tax rates for the duration of this parliament.

Mr Swinney said that the changes will raise a total of £553m next year when taken alongside changes to other taxes including Land and Buildings Transaction Tax (LBTT) - the Scottish equivalent of stamp duty.

The second homes tax part of LBTT will rise from 4% to 6%.

The deputy first minister also confirmed an extra £550m for local government next year. Local authorities had been asking for much more, but will be given full flexibility to set their own council tax rates.

Mr Swinney said councils should "consider carefully the cost pressures facing the public" when deciding the rate they will charge people.


The Scottish Child Payment will remain at the increased level of £25 per child per week, with all other social security benefits under the control of the Scottish government being increased by the rate of inflation in September of 10.1%.

The chancellor had already confirmed that benefits and pensions paid by the UK government would also rise by that figure.

Spending on health and social care in Scotland will increase by £1bn, Mr Swinney said.

And funding of £20m that had been set aside for a referendum on Scottish independence will instead be used to help people at risk of fuel poverty.

The Supreme Court recently ruled that the Scottish government does not have the power to hold a vote without the formal consent of Westminster.

Meanwhile, the basic rate of business rates, which is also called the poundage, will be frozen at 49.8p. The intermediate property rate, at 51.1p, will be charged on properties with a rateable value of between £51,001 and £100,000. The threshold for the higher property rate will increase from £95,000 to £100,000.

Mr Swinney said the budget was being announced against the backdrop of the "most turbulent economic and financial context most people can remember".

He added: "War is taking place in Europe, leading to the suffering and displacement of millions of Ukrainians. As a result of the conflict, energy and fuel prices are surging. Inflation is now corroding our economy having reached a 40-year high.

"If these challenges - faced by countries around the globe - were not enough, the UK has added to the turmoil by a disastrous approach to Brexit which has damaged labour supply through the loss of free movement of people and undermined frictionless trade with our nearest markets.

"All of these difficulties have been compounded by the utterly catastrophic decisions of the UK government in the September mini-budget, which have driven increases in interest rates and saddled the country with much higher debt, undermining the public finances for generations to come."

Scottish Conservative finance spokesman Liz Smith said Mr Swinney should "stop blaming the UK government for every single predicament".

And she said she was concerned about the tax differential between Scotland and the rest of the UK, which she fears could make Scotland a less attractive place to work, live and invest.

Scottish Labour finance spokesman Daniel Johnson said: "The fact is that this money is going to have to be used to fix some of the damage done by 15 years of SNP cuts and failure.

"It is down to John Swinney to show how this money will be used to support our public services, and not to swell the ranks of spin doctors, quangos and apparatchiks."


John Swinney explains why he is asking higher earners to pay more in tax

The presiding officer suspended parliament to investigate how details of the tax rises were given to the BBC in advance of the budget statement


Newsletter

Related Articles

0:00
0:00
Close
UK Government Launches Review of Voluntary National Insurance Contributions System
UK Planning Inspectorate Reports Key Infrastructure and Planning Milestones in Annual Review
UK Government Reviews Travel Expense Reimbursement Rates for Employers and Employees
Civil Nuclear Constabulary Launches National Digital Memorial for Officers Killed in Service
UK and US Expand Collaboration on Nuclear Fusion Research and Workforce Exchange
Environment Agency Secures £275,000 Enforcement Deal with Anglian Water Over Permit Breaches
Independent Inspector Flags Ongoing Failures in UK Home Office Border Case Management
UK Government Considers Zero VAT Rate on Land for Social Housing Development
Bank of England Reports Sharp Drop in Emissions and Warns on Climate-Driven Financial Risk
Consumer Confidence in the UK Falls at Fastest Quarterly Rate Since 2022
UK Borrowing Costs Rise Sharply on Gilt Markets Amid Fiscal and Political Concerns
UK Government Plans Legislation to Bring British Steel into Public Ownership
UK Government Secures £210 Million Nuclear Fuel Deal to Support Ukraine Energy Security
London Ambulance Service Reports Record Emergency Call Volume Amid Severe Heatwave
United Kingdom Faces Record June Heatwave as Temperatures Hit 36.7°C in Somerset
UK Financial Services Reform Debate Intensifies Over Ministerial Regulatory Powers
UK Energy Price Cap Rise Expected to Keep Inflation Above Target Through 2026
UK Biohacking and AI Wellness Trends Drive Surge in Personal Health Monitoring
UK Social Care Sector Sees Workforce Shift as Overseas Recruitment Masks Domestic Labour Decline
Nuffield Trust Warns UK Health Budgets Remain Vulnerable Despite Record Spending Levels
UK Coal Pension Surplus Debate Returns to Parliament as Reform UK MP Seeks Clarity on Distribution
UK MPs Consider E-Petition Calling for NHS Newborn Screening for Spinal Muscular Atrophy
UK Parliament Debates E-Petition Calling for Inquiry Into Pro-Israel Influence in Politics
UK Economy Grew 0.6 Percent in Q1 2026 but Business Sentiment Weakens Over Geopolitical Risks
UK Financial Services Bill Enters Lords Committee Stage With Expanded Ministerial Powers
UK Armed Forces Bill Advances With Plans for Defence Housing Service and Drone Defence Measures
UK Treasury Proposes Higher Electricity Generator Levy and Updated Mileage Allowance Rules
UK Parliament Debates Health Bill Amid Persistent GP Access and Patient Satisfaction Concerns
UK Financial Sanctions Regulator Signals Faster, Intelligence-Led Enforcement Strategy
British Chambers of Commerce Warns Business Confidence Crisis Is Dampening UK Investment
UK Parliament Debates Carbon Budget Order as Pressure Mounts on Net Zero Delivery
UK Energy Price Volatility Reinforces Pressure for Faster Electrification of Economy
UK Defence and Aerospace Strategy Gains Momentum as Keir Starmer Pushes Industrial Cooperation in Berlin
Department for Environment, Food and Rural Affairs Unveils £53 Million Investment in Farming Innovation
Foreign Secretary Announces Medical Evacuations and University Support for Palestinians in Gaza
Government-Commissioned Report Highlights Economic Exposure to Climate-Driven Fossil Fuel Price Shocks
Climate Change Committee Warns UK Is Off Track on Emissions Cuts and Calls for Faster Decarbonisation
Prime Minister Keir Starmer Calls for Deeper UK-EU Defence and Industrial Cooperation in Berlin Address
Met Office Issues Red Extreme Heat Warning as Temperatures Set to Surpass 37°C in England and Wales
Bank of England Holds Interest Rates at 3.75% as Inflation Outlook Remains Uncertain
UK Announces New Military Infrastructure at Catterick to Support Engineer Regiment Relocation
University of Reading Ranked Among Top 100 Globally for Sustainability Impact
UK Launches Counter-Fraud Taskforce to Investigate Covid Loan Scams
UK Government Introduces Customs and Tax Reforms to Support High Street Retailers
Jonathan Haskel Nominated as Chair of the UK Office for Budget Responsibility
UK Government Expands Powers to Recover Benefit Debt and Tackle Welfare Fraud
Labour Party Leadership Contest Intensifies as Andy Burnham and Ed Miliband Clash Over Economic Direction
Rail Operators Urge Essential Travel Only as Extreme Heat Threatens UK Network Stability
United Kingdom Issues Red Extreme Heat Warning as Temperatures Forecast to Reach 38°C
Keir Starmer Announces Resignation as UK Prime Minister Amid Deepening Political Instability
×