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The Scottish government’s latest budget introduces a range of new taxes and adjustments, including levies on high-value homes and private jet travel, alongside changes to income tax rates. Finance Secretary Shona Robison highlighted that these spending plans are designed to support families and contribute to eliminating child poverty in Scotland. BBC Verify has analyzed the budget to determine which groups across the country are likely to benefit and which may face disadvantages.
Central to the government’s approach is the focus on helping families cope with the cost of living. One flagship initiative, the Scottish Child Payment, which provides weekly financial support to families receiving benefits such as universal credit, is set to increase to £40 a week for children under the age of one. Additionally, the government has committed to launching breakfast clubs in every primary and special school throughout Scotland. Although these initiatives are scheduled to begin in 2027, following the next Holyrood election, they reflect key priorities presented in this budget. Funding improvements have also been earmarked for extracurricular activities, with an extra £2.5 million allocated for after-school programs, as well as investment in sports opportunities, including free swimming lessons for all primary pupils in recognition of Scotland’s men’s World Cup qualification and Glasgow’s hosting of the Commonwealth Games.
Further education colleges will receive a significant financial boost, with an additional £70 million allocated, reversing previous concerns highlighted by Audit Scotland and the Scottish Funding Council regarding cuts and sustainability challenges. Robison described this increase—a 10% rise compared to the 2025-26 budget—as a chance for colleges to play a transformative role in enhancing skills and meeting the workforce demands of the nation. Alongside education, business rates have been cut across all bands (basic, intermediate, and higher) in response to worries about the upcoming non-domestic rates revaluation. Transitional relief measures, including an extension of the small business bonus that exempts smaller properties from charges, will also be introduced. While the Scottish Fiscal Commission predicted that the property revaluation would originally boost revenues by £290 million, the tax cuts included in this budget reduce that figure by £153 million. Robison acknowledged calls to halt the revaluation but instead promised additional support if further resources become available.
On the other hand, the budget targets wealthier groups through a proposed “mansion tax.” This plan reserves £5 million for a targeted revaluation of properties worth over £1 million, aiming to create two new council tax bands to be implemented in 2027. According to an analysis by estate agent Savills, Scotland has more than 11,000 such properties, and this measure could generate around £14 million for local authorities, with areas that have higher-value homes standing to gain the most. Data from Registers of Scotland shows that over half of the 391 properties sold for more than £1 million in 2024-25 were located in Edinburgh. Despite this targeted revaluation, the wider council tax system remains tied to valuations from 1991, reflecting long-standing resistance to a comprehensive overhaul that would affect many homeowners. The government also plans to introduce a tax on private jet flights starting in 2028. These reforms continue the broader strategy of asking higher earners to contribute more toward funding public services.
Adjustments to Scotland’s devolved income tax system reflect a progressive tax philosophy, with six income bands ranging from 19% to 48%. The government’s goal is for most Scots to pay less income tax than if they resided elsewhere in the UK. This is achieved by raising thresholds for lower tax rates by 7.4%, which is roughly double inflation, while freezing thresholds for higher rates. Forecasts indicate that 55% of taxpayers will see small savings, generally no more than £40 annually, yet those earning around £50,000 could pay nearly £1,500 more compared to their counterparts in England. The government argues this reflects a trade-off for better-funded public services. While tax revenue estimates rely on forecasts from the Scottish Fiscal Commission, past data showed more Scots actually paid higher taxes than those living elsewhere in the UK. Nonetheless, ministers remain confident that the current projections will prove accurate and hope these budget measures will secure voter support in the upcoming elections
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