Scottish Income Tax outturn reconciliation for 2024-25

Under the Fiscal Framework agreed between the UK and Scottish Governments in 2016 and reviewed in 2023, the Scottish Government’s funding is initially based on forecasts of Income Tax and updated once actual Income Tax revenues are available. 

Actual Income Tax data for 2024-25 replaces forecasts of Scottish Income Tax (made by the Scottish Fiscal Commission) and forecasts of the associated Block Grant Adjustment (based on forecasts of UK Government Income Tax made by the Office for Budget Responsibility).    

This reconciliation process for 2024-25 can now be undertaken as HMRC have published 2024-25 Income Tax outturn data and the Office for National Statistics (ONS) and National Records of Scotland have published revised population estimates that affect the calculation of the Block Grant Adjustment: 

• Scottish Income Tax receipts are lower than forecast at the time of the 2024-25 Scottish Budget so this will decrease Scottish Government self-funding by £209 million in 2027-28.
• The associated Block Grant Adjustment is higher than forecast at the time of the 2024-25 Scottish Budget so this will increase Scottish Government’s block grant funding by £512 million in 2027-28.
• The net effect is a £720 million decrease in the Scottish Government’s overall funding for 2027-28.