Scottish Draft Budget 2017-18

Scottish Draft Budget 2017-18

The Draft Budget saw the first divergence between income tax in Scotland and the rest of the UK.

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The Scottish Draft Budget 2017-18 was presented to Holyrood on 15 December 2016 by Scottish Finance Secretary Derek Mackay, setting out Scotland’s tax and spending plans for the upcoming year. It held few surprises, but saw the first, albeit modest, divergence between the income tax positions of Scottish and other UK taxpayers, with a proposal to increase the higher rate tax threshold in 2017 by inflation to £43,430 rather than to follow the UK Government’s planned increase to £45,000.

Most of the other tax issues covered in the Draft Budget were a statement of ‘business as usual’, with the Scottish income tax rates to remain the same as in the UK for the 2017/18 tax year, the Land and Building Transaction Tax (LBTT) bands and rates to remain unchanged from 1 April 2017, and rates of Scottish Landfill Tax (SLfT) to maintain parity with those for UK Landfill Tax. 

UK Air Passenger Duty (APD) will cease to apply in Scotland from 1 April 2018. As previously announced, the Scottish Government has proposed to introduce a devolved tax to replace APD which is intended to reduce by 50 percent by the end of the current Parliament, and to be abolished entirely when resources allow. A bill for a devolved tax to replace APD will be introduced in the first year of the current Parliament.

For more information on the Scottish Draft Budget, please see our On a Page document.

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