Budget 2026 in Scotland, Wales and Northern Ireland

Budget 2026 gives the Scottish Government an extra £600 million, the Welsh Government an extra £450 million and the Northern Ireland Executive an extra £270 million for public services. It also cuts heating oil costs, extends the fuel duty cut and raises the minimum wage across the UK. Some tax measures apply differently in each nation, which matters for clients who live or trade across borders.

Extra funding by nation

The money arrives through the block grant, using the Barnett formula.

The Treasury says the Scottish and Welsh governments have at least £1.20 to spend per person for each £1 of equivalent UK government spending per person in the rest of the UK. Northern Ireland’s funding also sits alongside a separate £1.5 billion offer over three years to help the Executive agree a budget.

Cost of living measures

Each nation’s Treasury release lists the same UK-wide measures, with local figures.

• Heating oil. The 4% tariff on kerosene is removed. The Treasury says 142,000 Scottish households and 105,000 Welsh households rely on heating oil, and so do 61% of Northern Ireland households.
• Fuel. The 5p fuel duty cut is extended for six months to 30 June 2027. The 3.7p cut to red diesel duty continues.
• Mileage. A permanent increase in the generosity of mileage rates helps people who drive for work.
• Electricity VAT. The Scotland and Wales releases say the 0% VAT on household electricity is extended for three months to 30 June 2027.
• Food. Tariffs are removed on over 100 food products, saving households up to £21 a year in combination with earlier suspensions.

Pensioners and wages

The Pension Tax Allowance starts in April 2027. The Treasury expects around 93,000 low-income pensioners in Scotland, roughly 64,000 in Wales and roughly 40,000 in Northern Ireland to pay less or no tax by the end of this Parliament. Our post on the Pension Tax Allowance explains how it works.

The National Living Wage rises by 3.9% to £13.21 an hour. The National Minimum Wage for 18 to 20-year-olds rises 3.9% to £11.27, and for 16 to 17-year-olds and eligible apprentices it rises 3.9% to £8.31. The Treasury says an estimated 180,000 workers in Scotland, 170,000 in Wales and 140,000 in Northern Ireland saw a direct pay rise from the April 2026 increase.

Which tax rules differ

The savings and property income changes show how devolution shapes the detail.

HMRC’s tax information note points to section 80C of the Scotland Act 1998, under which the Scottish Parliament sets Scottish Income Tax rates, and section 116D of the Government of Wales Act 2006 for Welsh rates of income tax. Scottish and Welsh landlords should therefore wait for those governments’ decisions before applying the 2027 figures. See savings and property income tax and the High Value Council Tax Surcharge.

Other local announcements

Each release lists investment decisions. Examples include £18 million for a UK Advanced Chip Design Academy led by the University of Edinburgh, £6 million for the Scottish Event Campus, £30 million for the next stage of Cardiff Parkway station and £7.5 million for cybersecurity jobs and skills in Northern Ireland. Extended duty suspensions on 350 goods help firms in chemicals, plastics, hydrogen, automotive and food and drink in Scotland and Wales.

What advisers should do

1. Check the nation before applying a Budget measure. Property income rates and the surcharge do not apply the same way everywhere.
2. Watch the devolved budgets. Scottish and Welsh decisions on income tax rates can change the UK figures.
3. Advise heating oil and rural clients. The kerosene tariff removal and red diesel position matter to farms and rural businesses.
4. Tell employers about the wage rates. The new National Living Wage and minimum wage rates apply across the UK.

Frequently asked questions

How much extra funding does Scotland get in Budget 2026?

The Scottish Government gets an additional £600 million for public services, on top of £1.7 billion from Budget 2025 and Spring Forecast 2026.

Does the new property income tax rate apply in Scotland?

Not automatically. The 24%, 44% and 49% rates apply in England, Wales and Northern Ireland, and the Scottish and Welsh governments can set property rates under their income tax powers.

Does the High Value Council Tax Surcharge apply in Wales or Scotland?

No. It is a charge on residential property in England.

Is the National Living Wage different in Northern Ireland?

No. The Treasury release gives the same £13.21 National Living Wage and the same National Minimum Wage rates for Northern Ireland as for the rest of the UK.