STA Update: Headlines for business from today’s Scottish Government Budget 2023-24 Statement

The Scottish Government Budget 2023-24 was announced today and the full statement can be viewed here.

The main headlines for business are outlined below:

• SG assuming there will be no carrying forward of any fiscal resources from this year to the next.
• Outlook for future years is “looking particularly bleak in 2025-26 and 2026-27”.
• Acknowledged No 1. ask of business to freeze the non-domestic rates poundage at 2022-23 levels.
• To protect businesses from the full impact of inflation by delivering a freeze to the basic property rate.
• Will ensure Scotland has the lowest poundage in the UK for the fifth year in a row and is forecast to save business tax rate payers £308m compared to an inflationary increase.
• To reform and extend the small business bonus scheme to deliver manifesto commitment that 100,000 properties will be taken out of rates altogether.
• Transition reliefs will help to ensure those properties that see their rates liability increase significantly following the revaluation to do so in a “phased manner”.
• To maintain starter and basic rate bands for income tax. No changes to starter, basic and intermediate rates.
• The tax threshold for the top rate lowered from £150,000 to £125,140.
• Higher rate of income tax raised from 41p to 42p in the pound, and the top rate increased from 46p to 47p. Money raised to be used for NHS.
• No change to Land and Buildings Transaction Tax to main residential and non-residential tax bands next year.
• Legislation to be launched today to increase the rate of the Additional Dwelling Supplement from 4% to 6%.
• £550m extra announced for local government.
• Council tax to be fully flexible to be set by local authorities at the rate appropriate for their local area.
• Emphasis on green economy – “a stronger, fairer, greener economy benefits everybody.”

Additional headlines on ferries below:

• £440m to support lifeline ferry services to island communities.
• £15m in this financial year and £57m in the next to support completion of the two ferries at Ferguson Marine shipyard.
• There will be resources to build the two new Islay class vessels under construction, and a further two vessels of the same type currently in procurement.