KPMG comments following the announcement of the Scottish Government’s tax and spending plans

Vishal Chopra, Scotland's Head of Tax responds to the Scottish Budget

Vishal Chopra, Scotland's Head of Tax responds to the Scottish Budget

“Growing uncertainty around the pandemic meant this was a Budget of difficult choices that remained some way from feeling like business as usual. Kate Forbes unwrapped a package of public investment aimed at forecasting what level of support Scotland’s economy will need next year to recover. Rising inflation, challenging business conditions and issues around climate were all front of mind in a transitional budget which offered some early stocking fillers for businesses.

“100% uncapped relief from Business Rates has been available for certain Scottish businesses in retail, hospitality, leisure, and aviation for 2021/22, and so today’s announcement to give businesses in retail, hospitality, and leisure a 50% business rate relief for the first three months of 2022/23, albeit capped at £27,500 per rate payer, will provide a little extra comfort to businesses still dealing with the impact of COVID-19.

“Land & Buildings Transactions Tax (LBTT) rates and bands will remain unchanged for both residential and non-domestic properties, and the Government will shortly launch a call for evidence and views on the operation of the Additional Dwelling Supplement which remains unchanged at 4%.  Noticeable omissions were any changes to encourage environmentally friendly improvements, or an update on the devolved Air Departure Tax, which feel like missed opportunities given the Government’s focus on advancing its green agenda and net zero targets.  There was, however, confirmation of investment in energy transition and industrial decarbonisation projects, and landfill tax rates are to increase to maintain alignment with the rest of the UK.

“Other notable green announcements included the expansion of the Business Growth Accelerator relief for property improvements to include the installation of solar panels as a qualifying improvement. That will provide 100% relief on new builds for up to 12 months after first occupation and no rate increases for 12 months after a qualifying property improvement.

“On income tax, the Starter and Basic Rate bands will increase with inflation, while the Higher and Top Rate thresholds will remain frozen in cash terms.  This is estimated to raise an additional £106 million in 2022-23.

“This was a Budget which aimed to pave the way for the Government’s long term ambition of a fairer, greener future.  A Resource Spending Review to be released in May 2022 will set out the Government’s long-term funding plans and the roadmap for delivering key commitments.  For now though, many will be left wondering whether more could have been done to provide further support on the route to economic recovery, with many businesses undoubtedly feeling that their wish lists will remain unfulfilled this Christmas.”


Notes to Editors:

Contact Rory Brown for more information:

Corporate Communications Manager

M: +44 (0) 751 0374 794

About KPMG

KPMG LLP, a UK limited liability partnership, operates from 21 offices across the UK with approximately 16,000 partners and staff.  The UK firm recorded a revenue of £2.3 billion in the year ended 30 September 2020.

KPMG is a global organization of independent professional services firms providing Audit, Legal, Tax and Advisory services. It operates in 147 countries and territories and has more than 219,000 people working in member firms around the world. Each KPMG firm is a legally distinct and separate entity and describes itself as such. KPMG International Limited is a private English company limited by guarantee. KPMG International Limited and its related entities do not provide services to clients.

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