Taxation in Scotland
Scottish Government agencies
Revenue Scotland Registers of Scotland
National Taxation
Income Tax Land and Buildings Transaction Tax Landfill Tax Air Departure Tax
Local Taxation
Council Tax Business rates Visitor Levy
v t e

Taxation in Scotland today involves payments that are required to be made to three different levels of government: to theUK government, to theScottish Government and tolocal government. Taxes in Scotland are collected by various bodies –HM Revenue & Customs for reserved taxes,Revenue Scotland for devolved taxes and local taxation authorities.^[1]

In 2024–2025, taxation in Scotland controlled by theScottish Parliament generated £26.2 billion in revenue, with 61% of spending in Scotland raised through devolved taxes controlled by theScottish Government, and 39% generated through reserved taxes.^[2] In the same financial year, 37% of revenue raised in Scotland is devolved to the Scottish Government.^[2]

Until the 17th century, taxation was regarded as 'an extraordinary source of revenue that was levied for a specific purpose such as the defence of the realm'.^[3] However, during the 17th century,Parliament permitted a Land Tax to be collected from 1667, aHearth tax from 1691 to 1695 and aPoll tax from 1693 to 1699.^[3]

The 1707Union of theKingdom of Scotland with theKingdom of England formed a newKingdom of Great Britain, so that responsibility for taxation in Scotland became a matter for theWestminster Parliament, now the legislature for the new state.

The creation of a devolved Scottish parliament in 1999 was accompanied by a limited transfer of taxation powers: theScotland Act 1998 transferred the power to legislate for local taxation and alsothe power to vary income tax by plus or minus 3 pence in the pound. Most taxation powers in Scotland following the creation of the parliament remained a reserved matter for Westminster. Following theCalman Commission, theScotland Act 2012 transferred powers overStamp duty Land Tax, andLandfill Tax (both since replaced byLand and Buildings Transaction Tax andScottish Landfill Tax, respectively) and reduced rates of Income tax in Scotland by 10 pence in the pound at all bands, reducing theBarnett formula by the equivalent sum, and requiring the Scottish parliament to set a Scottish Income tax rate to replace the lost revenue but with the ability to set it higher or lower than 10 pence in the pound if it wished.

Following promises made during theScottish independence referendum that led to theSmith Commission, theScotland Act 2016 added powers overAir Passenger Duty andfull control over Income tax on non savings and non dividend income (excluding the personal allowance which is still set by the UK parliament.)

Despite these tax powers having been transferred, over half of all taxes collected in Scotland remains under the direct control of the UK parliament which has remained a reserved matter to itself all powers overCorporation tax,National Insurance,Value-added tax (VAT),Capital gains tax,Inheritance tax,Aggregates LevyInsurance Premium Tax andMotoring taxes.^[4]

TheScottish Government has full or partial control over the following taxes, and are collected byRevenue Scotland:^[1]

• Income Tax – partially devolved. The Scottish Parliament sets rates and bands for non-savings and non-dividend income only. The remaining aspects of Income Tax are reserved to the UK Government, and is collected and administered by HM Revenue & Customs.
• Land and Buildings Transaction Tax - fully devolved to the Scottish Parliament, and administered by Revenue Scotland.
• Landfill Tax - set by the Scottish Parliament and administered by Revenue Scotland.
• Council Tax – fully devolved to the Scottish Parliament, and set, administered, and spent by local authorities
• Non-Domestic Rates – set by the Scottish Parliament, administered and collected by local authorities who retain all of the revenue raised locally.
• Air Departure Tax – fully devolved to the Scottish Parliament
• Aggregates Tax – fully devolved to the Scottish Parliament

Under the terms of theScotland Act 2016, VAT became an assigned tax, meaning a proportion of VAT revenues would be directly assigned to the Scottish budget each year.^[5] This has resulted in a reduction in the block grant the Scottish Government receives for spending.^[5] The proportion would be the first 10p of the standard rate of VAT and the first 2.5p of the reduced rate of VAT raised in Scotland.^[5]

As of November 2025, the Scottish Government and UK Government continues to collaborate to streamline processes for determining specific methodology for calculating how much Scotland receives through this means of revenue.^[5] HM Revenue & Customs retain the responsibility for collecting VAT across the United Kingdom, with the UK Government remaining responsible for the operation of VAT.^[5]

The following taxes are reserved toHis Majesty's Government, and are collected byHM Revenue & Customs (HMRC):^[6]

• Value Added Tax rates (partially)
• Fuel duty
• Some aspects of income tax
• Corporation tax

• Blanch fee
• Buttock mail
• Court of Exchequer (Scotland)
• Edinburgh congestion charge
• Full fiscal autonomy for Scotland
• Government Expenditure and Revenue Scotland
• Income tax in Scotland
• Local income tax in Scotland
• Taxation in the United Kingdom
• Teind
• Window tax

• Taxation in Scotland

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