Scotland and Wales each have their own tax authority. Revenue Scotland collects Land and Buildings Transaction Tax, Scottish Landfill Tax and, since 1 April 2026, Scottish Aggregates Tax; the Welsh Revenue Authority collects Land Transaction Tax and Landfill Disposals Tax. Income tax is only partly devolved: the Scottish Parliament and the Senedd set rates on earnings, pensions and rental income, but HMRC still runs and collects it.

Which taxes does Revenue Scotland collect?

Revenue Scotland describes itself as Scotland’s devolved tax authority. It was established in 2015 and is a non ministerial office accountable to the Scottish Parliament, with a board appointed by the Scottish Ministers. It currently administers three taxes, each replacing a UK tax in Scotland:

Scottish tax UK tax it replaced In force from
Land and Buildings Transaction Tax (LBTT) Stamp Duty Land Tax 1 April 2015
Scottish Landfill Tax (SLfT) UK Landfill Tax 1 April 2015
Scottish Aggregates Tax (SAT) Aggregates Levy 1 April 2026

Returns are filed through the Scottish Electronic Tax System (SETS), not through HMRC. Revenue Scotland works closely with Registers of Scotland and the Scottish Environment Protection Agency (SEPA). See LBTT explained and Scottish Landfill Tax for how each works.

Two more taxes are on the way. Revenue Scotland says it will take on Air Departure Tax and the Scottish Building Safety Levy. Air Departure Tax was legislated for in the Air Departure Tax (Scotland) Act 2017, but its start date has been fixed as 1 April 2027; from that date Air Passenger Duty will stop applying to flights from Scottish airports. The Scottish Government has said it will match Air Passenger Duty rates and bands for 2027 to 2028, and regular aircraft operators will file quarterly rather than monthly returns.

Who does Scottish Aggregates Tax affect?

Revenue Scotland lists quarry operators, businesses importing aggregate from outside the UK for use in Scotland, businesses in England, Wales or Northern Ireland that sell aggregate to Scottish customers, and intermediaries such as merchants and contractors. Anyone who commercially exploits aggregate in Scotland must enrol. The rest of the UK still uses the Aggregates Levy.

Which taxes does the Welsh Revenue Authority collect?

Since 1 April 2018 the Welsh Revenue Authority (WRA) has collected and managed two devolved taxes for the Welsh Government:

  • Land Transaction Tax (LTT), which replaced Stamp Duty Land Tax in Wales from 1 April 2018. See LTT explained.
  • Landfill Disposals Tax (LDT), administered with Natural Resources Wales.

The WRA is also responsible for the Visitor Levy and the registration of visitor accommodation. Its annual report for 2025 to 2026 records that Cardiff Council has decided to introduce the levy from 1 April 2027.

The Welsh Government’s draft budget statement for 2026 to 2027 said LTT residential and non residential rates and thresholds would stay unchanged, and that the LDT standard rate would rise in line with forecast RPI while the lower rate and the unauthorised disposals rate stay at 5% and 150% of the standard rate. Taken together, Welsh rates of income tax, LDT, LTT and non domestic rates were expected to contribute more than £5bn to the Welsh budget in 2026 to 2027.

How much control do Scotland and Wales have over income tax?

Neither country has a fully devolved income tax. HMRC still identifies taxpayers, issues codes and collects the tax; the devolved parliaments decide rates on a slice of income. The powers are not the same:

Point Scotland Wales
Legal power Scotland Act 1998, section 80C Government of Wales Act 2006, section 116D
What can be set The Scottish basic rate, any other rates, and the limits between them A Welsh rate added to each of the basic, higher and additional rates after the UK rates are cut by 10 points
Bands Set in Scotland; six rates from 19% to 48% for 2026 to 2027 Same thresholds as England and Northern Ireland
Timing One year only, resolved before the year starts and no more than 12 months before The same
Rate format Whole or half numbers, or zero Whole or half numbers
PAYE code prefix S C

In both countries savings interest and dividends are taxed at UK rates, and the Personal Allowance is the UK figure. For Scotland, section 80C(2B) also allows different rates for property income, but not different rates for other types of income. For Wales, the Finance Act 2026 adds Welsh property rates, calculated the same way as the main Welsh rates, from 2027 to 2028. The detail is on Scottish Income Tax rates and bands and Welsh rates of income tax.

Who counts as a Scottish or Welsh taxpayer?

Status follows where the individual lives, not where they work or where their employer or pension provider is based. A Scottish taxpayer must be UK resident for income tax and meet one of three conditions in section 80D of the Scotland Act 1998: a close connection with Scotland (broadly, their only or main home is there), no close connection with anywhere else in the UK and more days in Scotland than in any other part, or being an MP for a Scottish constituency or a Member of the Scottish Parliament. Section 116E of the Government of Wales Act 2006 mirrors this for Wales. Status applies for the whole tax year. The tests are covered in depth in who is a Scottish taxpayer.

Can Scotland or Wales create new taxes?

Only through Westminster. Taxes in general are reserved: Head A1 of Schedule 5 to the Scotland Act 1998 reserves fiscal policy, including taxes and excise duties, with exceptions only for devolved taxes and for local taxes that fund councils, such as council tax and non domestic rates. A “devolved tax” means one specified in Part 4A of the Act, which currently lists taxes on transactions in Scottish property (section 80I), landfill disposals (80K), air passengers departing Scottish airports (80L), the commercial exploitation of aggregate (80M) and wild fisheries (80N).

New taxes can be added by Order in Council under section 80B of the Scotland Act 1998, or under section 116C of the Government of Wales Act 2006 for Wales. In the Welsh case the draft Order must be approved by both Houses of Parliament and by the Senedd. In both countries a devolved tax cannot be imposed if it would be incompatible with international obligations (section 80A(3) and section 116A(3)).

Which tax applies when a business works across the border?

Each devolved tax follows a physical connection, so the same business can owe tax to three authorities:

  • Property purchases: LBTT for property in Scotland, LTT for property in Wales, Stamp Duty Land Tax for England and Northern Ireland. Where the buyer lives is irrelevant.
  • Landfill: the tax depends on where the landfill site is. Sites in England and Northern Ireland pay UK Landfill Tax to HMRC.
  • Aggregate: SAT where aggregate is commercially exploited in Scotland, which can reach a supplier based in England.
  • Income tax: depends on each employee’s home, so one payroll can run English, Scottish and Welsh codes side by side.

What does this look like for one business?

Illustration only. A contractor based in Newcastle has a year with the following activity:

  • It buys a small office in Glasgow. The LBTT return and payment go to Revenue Scotland through SETS.
  • Waste from a job in Cardiff goes to a Welsh landfill site. The site operator accounts for LDT to the WRA and passes the cost on in its gate fee.
  • One employee lives in Edinburgh and has an S code; another lives in Swansea and has a C code. Both are taxed through the contractor’s normal PAYE scheme, and HMRC collects all of it.
  • Its corporation tax, VAT and National Insurance stay with HMRC, because none of them is a devolved tax.

What mistakes do people make?

  • Sending devolved returns to HMRC. LBTT and SLfT go to Revenue Scotland; LTT and LDT go to the WRA.
  • Applying Scottish or Welsh rates to savings and dividends. Those are taxed at UK rates everywhere.
  • Assuming Wales has its own bands. Only the rates can differ; the thresholds match England and Northern Ireland.
  • Missing Scottish Aggregates Tax on sales into Scotland. Suppliers outside Scotland can be within scope from 1 April 2026.
  • Treating Air Departure Tax as live. Air Passenger Duty continues to apply to Scottish departures until 1 April 2027.

If HMRC opens a check into your return, tax investigation insurance pays your accountant’s fees. Solar Protect cover pays up to £100,000 with no excess; it never pays tax, interest or penalties. Read how our cover works or get a quote.

Related Accountapedia entries

Sources

Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 8 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.