Higher earners in Scotland will see a freeze on their income tax thresholds for the 2025/26 tax year at the same time as lower earners were given a 3.5% threshold increase in yesterday’s Scottish Budget.

The basic and intermediate income tax bands in Scotland will increase by 3.5% from April 2025, meaning their earnings will be taxed at a lower rate than under the current system.

Scotland has six income tax bands, in contrast to England, Wales and Northern Ireland where there are three.

According to Hargreaves Lansdown, around 1.5m Scots who earn over £28,850 will pay more income tax in Scotland than they would elsewhere in the UK.

Scottish Finance Secretary’s Shona Robison’s announcement yesterday will ease the tax burden for many of those further down the income scale.

The Secretary said that the proposals in the Budget would mean that the majority of taxpayers in Scotland will pay less in income tax than those in England from 2025.

Sarah Coles, head of personal finance at Hargreaves Lansdown, questioned whether the changes could drive higher earners out of Scotland.

She said: “The freezes for higher earners pile more tax misery on an already hefty burden. The Scottish government is keen that those with the broadest shoulders carry the biggest burden, but those shoulders will be feeling increasingly painful.

“Whenever tax changes kick in, it raises the question of whether it will be enough to persuade higher earners to leave Scotland. However, you don’t need to part with the attractions of life north of the border in order to pay less tax. Tax free allowances including ISAs and SIPPs can play an essential role in keeping your tax bill down, rather than having to consider anything more drastic.”

Other changes announced in the Scots Budget include the abolition of the two-child benefit cap in Scotland and the promise of a transformation fund for agriculture.