MSPs agree income tax rates for 2026/27

MSPs voted by 93 votes to 29 this afternoon in favour of the Scottish Rate Resolution (SRR), endorsing the plans set out by the Scottish Government in last month’s budget. The vote must take place before MSPs can vote to agree the budget.

The Scottish Government’s income tax plans for 2026/27 retain existing rates and bands and increase the thresholds for the basic and intermediate rates of tax by 7.4 per cent. The Cabinet Secretary, Shona Robison, said the measures maintained the government’s 2024 commitment to leave income tax rates and bands untouched this side of the Scottish Parliament elections, and would ensure a majority of Scots paid less income tax than if they lived elsewhere in the UK.

For the Scottish Conservatives, Craig Hoy accused the government of a “stealth raid” on middle earners with its decision to freeze higher tax thresholds and said that his party would reduce income tax to 19p for everyone earning under the current higher rate income tax threshold.

Ross Greer (Green) said Scotland had the ‘most progressive’ income tax system in the UK. But he also called on the new parliament to shift its focus from the taxation of income to wealth, expressing frustration at the inability of MSPs to agree to council tax reform.

And Willie Rennie (Lib Dem) said the government to adopt a ‘cautious’ and ‘predictable’ approach to setting income taxes, warning that successive income tax rises in recent years had dampened public confidence and trust in the tax system.

You can read CIOT's Scottish Budget reaction from last month here.