Scotland and Wales 2025/2026 Budget Announcements

Scotland

The Scottish Parliament has the authority to set the income tax rates and bands for non-savings, non-dividend income of Scottish taxpayers.

However, responsibility for the rest of the Income Tax system, including all reliefs and exemptions, as well as the setting of the UK-wide Personal Allowance and its associated taper rate, remains with the UK Parliament. Additionally, Income Tax on savings and dividend income is also reserved to the UK Parliament

• The Starter rate band will increase by 22.6% and the Basic rate band will increase by 6.6%. This will increase the thresholds for paying both the Basic and Intermediate rate of tax by 3.5%.
• This increase is significantly above inflation, which is 1.7%, based on the Consumer Price Index from September 2024.
• The Higher, Advanced and Top rate thresholds will be frozen at their current levels in cash terms to the end of this Parliament (2026-27).
• The UK Government confirmed in the 2024 Autumn Statement that the UK-wide Personal Allowance will remain frozen at £12,570.

2025/2026

2024/2025

Wales

Income tax is partially devolved to Wales, allowing the Welsh Government to adjust the three income tax rates (basic, higher, and additional) for Welsh taxpayers. However, all other aspects of the tax remain under the control of the UK Government, and HMRC continues to manage income tax in Wales.

As part of the Welsh Tax Policy report, which accompanies the Welsh Draft Budget for 2025-2026, Mark Drakeford MS presented his proposal to the Welsh Assembly in WRIT for April 2025Wales continues to stay aligned with the rest of the UK.

2025/2026