Scottish Budget 2024 unveiled at Holyrood

Finance secretary Shona Robison unveiled her Budget at Holyrood on 4 December¹. The plans cover income tax thresholds, a new winter payment for pensioners, council tax and the two-child benefit cap, and will not come into force until they have been approved by the Scottish Parliament and given royal assent¹.

Income tax rates in Scotland will stay the same from April 2025, although the basic and intermediate rate thresholds will increase by 3.5%¹. The starter rate threshold rises from £12,571 to £14,876 in 2024-25 to £12,571 to £15,397 in 2025-26, and the basic rate band moves from £14,877 to £26,561 to £15,398 to £27,491¹. The intermediate rate band becomes £27,492 to £43,662, from £26,562 to £43,662¹. The higher, advanced and top rate bands are unchanged at £43,663 to £75,000, £75,001 to £125,140 and more than £125,140 respectively, with rates of 42%, 45% and 48%¹.

The Scottish government has confirmed that all Scottish pensioners will receive a Pension Age Winter Heating Payment in winter 2025¹. Those in receipt of qualifying benefits will get £200 or £300, depending on their age, while all other pensioner households will receive £100¹. The announcement follows the UK government's decision to limit the Winter Fuel Payment to those receiving Pension Credit or other specific means-tested benefits; previously most people over state pension age were eligible, and the change resulted in about 900,000 fewer people in Scotland receiving a payment this winter¹.

The two-child benefit cap, which prevents parents from claiming child tax credit or universal credit for more than two children, will be scrapped in Scotland from 2026¹. The Scottish government says it will "develop the systems necessary" to make that possible during the next financial year, but says success will be dependent on the UK government's agreement and cooperation¹.

There will be no limit set on council tax rises for 2025-26¹. This is despite the Chancellor Rachel Reeves' Autumn Budget pledge to give £200m to local authorities across the UK to help them cover the costs of a continued freeze on rates¹. Robison stated in her speech that there is "no reason for big increases in council tax next year"¹. Robison also pledged to invest £786m in affordable homes, which the funding boost will help housing providers in Scotland build or acquire at least 8,000 homes for social rent, mid-market rent and low-cost home ownership¹.

Why it matters for households

Scottish income taxpayers keep the same rates from April 2025, but the higher starter and basic thresholds mean more of a person's income falls into the lower bands¹. The Pension Age Winter Heating Payment is a new, separate payment for winter 2025: pensioner households on qualifying benefits receive £200 or £300 depending on age, and other pensioner households receive £100¹. That sits alongside the UK Winter Fuel Payment, which this winter reached about 900,000 fewer people in Scotland after being limited to those on Pension Credit or other specific means-tested benefits¹. The two-child cap change, affecting parents claiming child tax credit or universal credit for more than two children, is planned for 2026 and depends on UK government agreement and cooperation¹. Council tax bills in Scotland could rise from April because no cap has been set for 2025-26¹.

What happens next

Members of the Scottish Parliament will debate the draft Budget and vote on whether to pass the bill; if approved and given royal assent, the plans come into force in April 2025¹. The SNP-led Scottish government has a minority in parliament and will need the support of opposition MSPs to pass the bill¹. If parliament is completely deadlocked after the Budget goes to a final poll, it is possible that an election would have to be called next year¹.