Yesterday, the Finance Secretary announced the Scottish Government’s budget for the year ahead. Our summary brings you the key announcements for Edinburgh’s businesses, including transitional reliefs on non-domestic rates, and an increase in certain income tax bands.

Economic forecasts

• The Scottish Fiscal Commission expects the Scottish economy to grow 1.2 per cent in 2025-26, increasing slightly to 1.3 per cent in 2026‑
• Inflation in Scotland is forecast to fall to 2.5 per cent in 2026 and return to the Bank of England’s 2 per cent target in early 2027.

Tax

Business rates:

• In response to concerns over revaluation, the Basic, Intermediate and Higher Property Rates will be reduced for 2026-27, and a Revaluation Transitional Relief worth £184m will be introduced to cap increases in gross bills up to the next revaluation in 2029.
• Retail, hospitality, and leisure premises liable for the Basic or Intermediate Property Rates (with a rateable value up to and including £100,000), will receive 15% non-domestic rates relief for those 3 years. If UK Gov. makes changes to rates for hospitality premises such as pubs in England, any additional funds made available to SG will be used to support the sector.
• The Small Business Bonus Scheme will be continued at current rates and thresholds for the next 3 years. For those losing this relief on 1^st April 2026, a Small Business Transitional Relief will be introduced.

Income tax:

• Thresholds for the Basic and Intermediate income tax bands will increase by 7.4%. The thresholds for the Higher, Advanced and Top rates will be frozen up to 2028‑

Other taxes:

• By April 2028, two new Council tax bands will be introduced for properties worth over £1 million and over £2 million.
• From April 2027, the Air Departure Tax will come into force (with a likely exemption for Highlands and Islands), set at the same level as UK APD for the first year. In April 2028 an additional levy on private jets will be introduced.

Business support

• Delivering on promise to invest £1bn in SNIB by end of parliamentary term, along with £326 million expenditure on the Enterprise Agencies.
• Nearly £40 million will be invested in Visit Scotland in 2026‑27 to promote Scotland and grow international connectivity.
• An additional £20 million will be invested in the culture sector.
• A new £2.5 million Young Entrepreneurs Package has been created.
• The £3 million funding for Police Scotland’s Retail Crime Taskforce will be maintained.

Skills and employment

• £90 million will be invested in employability services, and colleges will receive £8 million to deliver new or expanded initiatives to help adult learners get the skills and qualifications needed to secure new employment opportunities.
• Additional funding will go towards wrap-around activities provision at the start and end of the school day to support parents in work.
• Scotland’s colleges will see a combined 10% increase in resource and capital funding, and a 5% increase for our universities.

Housing and infrastructure

• £11.7 million has been allocated to establish a National Collections Hub for National Galleries of Scotland and National Museums of Scotland, part of Granton’s regeneration.
• £926 million will be invested in 2026-27 in the Affordable Housing Supply programme.
• Investment of over £500m over 2026-27 to support carbon-free transport, heating for businesses and homes, and renewable generation.
• £93 million capital and financial transactions funding to build Offshore Wind infrastructure and develop the supply chain.
• Published alongside the Budget is an Infrastructure Delivery Pipeline. This sets out specific investment plans totalling £11.1 billion, as well as plans to develop new revenue-financed programmes of investment. More projects will move into the Pipeline as business cases are approved over the next four years.

For more analysis and insight, keep an eye Chamber newsletters and wider Chamber comms over the coming weeks. Get in touch with our policy team at policy@edinburghchamber.co.uk with any thoughts or feedback on how the budget might affect your business.