The Institute of Chartered Accountants of Scotland (ICAS) has raised concerns that the 2026/27 Scottish Budget does not adequately address the country’s underlying economic issues, despite record spending commitments.
The Budget Bill passed its third and final stage in the Scottish Parliament at Holyrood, confirming almost £68bn in total funding. Members of the Scottish Parliament (MSPs) backed the measure by 66 votes to 29, with 24 abstentions.
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
It includes £22.5bn allocated for health and social care, alongside enhanced support measures for the cost of living, infrastructure investment and additional assistance for families and household finances.
Income tax thresholds were increased in the basic and intermediate bands. As a result, workers in the lower tax brackets will pay up to £40 a year less than people on the same income elsewhere in the UK.
However, people earning more than £50,000 will pay almost £1,500 more than those on the same salary elsewhere in the UK, the BBC reported, citing Scottish Fiscal Commission forecasts.
ICAS CFO Chris Barber said: “The Scottish Budget passed at Holyrood today falls short of delivering the meaningful, long-term changes that Scotland’s households and businesses need.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalData“While raising the starting point for the basic and intermediate income tax thresholds by 7.4% may sound like good news, in practice it gives low earners just £11 of additional income a year.
“With no reform of the rest of the system, fiscal drag will continue to pull more people into higher tax bands over time, quietly increasing the burden on households without growing the overall tax base.
“Relying on small adjustments and stealth tax rises like this to meet short-term pressures isn’t a credible or sustainable route to economic growth. Tax policy should be grounded in clear evidence and long-term analysis, not incremental changes that raise revenue by default rather than by design.”
Earlier this month, an ICAS survey suggested that nearly four in five accountants were not confident about the state of the Scottish economy.
According to the findings, only 6% of respondents expressed confidence in current economic conditions, while 78% said they lacked confidence.
When asked to identify priorities for policymakers, respondents most often called for a long-term strategy for economic policy and the tax system.
