In Scotland, individuals, households and businesses pay taxes on things like income, property and certain goods and services. As we start the new tax year, there are a number of changes coming that could affect your business and the amount of tax you pay.
Read our guide to tax changes in Scotland and what you need to know for the 2025/2026 tax year.
Tax Changes in Scotland: How do they Differ from the UK?
Scottish taxes are either collected by local authorities, Revenue Scotland or HMRC to fund public services like health and social care, education and transport. There are three different types of tax in Scotland:
- partially and fully devolved taxes to the Scottish Government
- local taxes
- taxes reserved to the UK Government
The UK tax year runs from April each year to the following April, with new tax changes coming into effect on April 6th 2025. Taxes either partially or fully devolved to Scotland include Income Tax, Land and Building Transaction Tax, Landfill Tax, Council Tax, Non-Domestic Rates and the Scottish Aggregates Tax, going live in April 2026.
Tax Changes Impacting Your Business in 2025
Changes to Employer National Insurance Contributions (NIC)
Employer NICs, also known as secondary Class 1 NICs, are taxes paid by employers on their employees’ earnings above a certain threshold. National Insurance is not devolved to Scotland meaning any UK changes apply to Scotland.
As of 6th April, Employers’ NICs will increase from 13.8% to 15%, while the NIC liability threshold will drop from £9,100 to £5,000 until 5 April 2028, after which it will be adjusted with the consumer price index. To ease the impact, the employment allowance will rise from £5,000 to £10,500, and the previous £100,000 eligibility cap will be removed.
The change will impact approximately 1.2 million UK employers with around 250,000 seeing their liability decrease and 940,000 seeing it increase.
Land and Buildings Transaction Tax Changes (LBTT)
Land and Building Transaction Tax is the Scottish equivalent of Stamp Duty Land Tax (SDLT) and is a tax you pay if you are buying property or land in Scotland above a certain value. A lot of people know it as a tax you pay when buying a house, but it also applies to non-residential purchases and leases.
Existing residential and non-residential LBTT rates and bands will remain unchanged in the new tax year. However, the rate of Additional Dwelling Supplement (ADS) will increase from 6% to 8% for transactions entered into on or after 5 December 2024. For contracts entered into on or before 4 December increases won’t apply and the previous rate of 6% will apply.
To calculate how much LBTT you must pay, use this online calculator.
Scottish Landfill Tax Changes
Anyone disposing of waste at a landfill site in Scotland must pay Scottish Landfill Tax. As of this tax year, the standard rate of tax will increase to £126.15 per tonne with the lower rate increasing to £4.05 per tonne. This is in line with UK Landfill Tax rates and takes account of inflation.
Non-Domestic Rates Changes
Non-domestic rates, often referred to as business rates, are a tax on non-domestic properties held by the private, public and third sectors to help pay for local council services. These include services like education, social care and waste management.
In 2025/2026, the Basic Property Rate will be frozen at 49.8p for properties with a rateable value up to and including £51,000. However, there will be inflationary increases (1.7%) to the Intermediate Property Rate (55.4p) and Higher Property Rate (56.8p).
There are a number of tax rates reliefs available to businesses, including the Small Business Bonus Scheme and Rural Rates Relief for businesses in rural communities. The Scottish Government is also introducing a new 40% relief for hospitality premises liable for the Basic Property Rate in mainland Scotland.
Keep Up with Tax Changes with a Chartered Accountant
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