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The Fiscal Framework Outturn Report 2025 publishes outturn and reconciliation information for Scottish Income Tax, Scottish Landfill Tax, Land and Buildings Transaction Tax and devolved Social Security benefits, as well as updates on borrowing and the Scotland Reserve.

Introduction

This is the eighth Fiscal Framework Outturn Report published by the Scottish Government. It forms part of a revised Budget process, as recommended by the final report of the Budget Process Review Group.

In keeping with the recommendations of the Group, it contains the following information:

• Outturn data for Scottish devolved tax revenues and social security benefits expenditure (including comparison of outturn with forecast)
• Calculation of outturn Block Grant Adjustments (BGAs) and comparison with forecast.
• Net effect on Budget (revenue/expenditure minus BGA) for each tax and social security benefit relative to forecast.
• Implications of reconciliations for the subsequent financial year
• Commentary on latest available outturn data for income tax, devolved taxes and social security.
• Payments into the Reserve and withdrawals from the Reserve
• The balance of the Scottish Reserve at the start and end of the previous financial year (with explanations for reasons for withdrawal or source of surplus).
• Borrowing undertaken during the past financial year, and assessment of how far Government remains below its various different borrowing limits.
• Implications of borrowing in terms of estimated profile of future repayments.

Terminology used in this document

The Scottish Government must rely on forecasts when setting each Budget, and the UK Government also relies on forecasts when determining BGAs. When information about actual revenues and expenditure becomes available – known as ‘outturn data’ – subsequent Budgets are adjusted to account for the difference between forecast and outturn data. This process is known as a ‘reconciliation’ and can involve additions or reductions to Scotland’s Block Grant.

Outturn figures are, at times, first published on a provisional basis before a final figure is published. Final outturn is then used to calculate final reconciliations, which are applied to Scotland’s block grant. A full explanation of the reconciliation process, BGAs and the calculation of Scotland’s Block Grant can be found in the Technical Note on the Fiscal Framework.

Data used in this document

The 2025-26 to 2029-30 tax revenue and social security benefits expenditure forecasts within this report have been drawn from the forecasts published by the Scottish Fiscal Commission (SFC) on 25 June 2025. The 2024-25 Income Tax revenue forecast is also based on SFC forecasts.

The forecasts of the BGAs are based on the Office for Budget Responsibility (OBR) forecasts of devolved tax revenues and social security benefits expenditure in the rest of the UK made at the Spring Statement on 26 March 2025. BGAs are based on the forecasts for devolved taxes and social security benefits where the UK Government retains responsibility for them, which is England and Northern Ireland for tax and England and Wales for social security.

Updated forecasts from the SFC will be published alongside the 2026-27 Scottish Budget. The OBR will publish its next set of forecasts alongside the UK Government’s Autumn Budget 2025, which will allow for the calculation of updated forecasts of BGAs.

It is prescribed in the Budget Process Session 6 Agreement between the Scottish Government and the Finance and Public Administration Committee that the Fiscal Framework Outturn Report is published in September each year, as was recommended by the Budget Process Review Group. As a result of changes to third party publication schedules, some final outturn is unavailable before the publication of the FFOR. When final outturn is not published by 30 September, provisional data is used.

Whether the data is final or is provisional is detailed as follows:

• HMRC 2023-24 outturn data for both Scottish Income Tax revenues and the equivalent revenues for the rest of the UK are final.
• The 2024-25 outturn revenue data for Stamp Duty Land Tax (SDLT) and UK Landfill Tax, which feed into the BGA calculations for Land and Buildings Transaction Tax (LBTT) and Scottish Landfill Tax (SLfT) are final.
• The final, audited 2024-25 LBTT and SLfT revenue data will be published as part of Revenue Scotland’s Annual Reports and Accounts towards the end of the calendar year 2025 and the revenue outturn data used within this report is therefore provisional.
• Provisional outturn data is also used for 2024-25 Social Security benefits expenditure and final outturn will be published as part of the Social Security Scotland Annual Report and Accounts, which is expected by the Autumn.
• Provisional UK Government Social Security benefits expenditure outturn data has also been used to calculate the BGAs with final outturn being made available when the Local Authority, Parliamentary, and Country and Regional Tables 2024/25 are published later this year.
• Final outturn data is used for Fines, Forfeitures and Fixed Penalties revenue outturn for 2024-25. It has been published as part of the Scottish Government’s 2024-25 Scottish Consolidated Fund Accounts.
• Outturn BGAs for LBTT, SLFT and social security benefits in 2024-25 are based on the latest mid-2024 population estimates from the Office for National Statistics (ONS) for England and Wales, National Records of Scotland (NRS) for Scotland and Northern Ireland Statistics and Research Agency (NISRA) for Northern Ireland. Alongside the mid-2024 estimates, ONS published revisions to their mid-2022 and mid-2023 population estimates and NRS published revisions to their mid-2023 population estimates, meaning the 2023-24 income tax outturn BGA is also based on the latest population estimates.

Historically, the difference between provisional and final outturn data has varied. In 2020, 2021, 2023 and 2024 the differences were small when comparing provisional outturn to final outturn for tax revenue, social security expenditure and BGAs. But in 2022 the change was much larger - £119m – driven by a £37m change to the LBTT BGA and £62m change on ADP. Therefore, it is hard to predict the scale of change from the provisional outturn data detailed in this FFOR 2025 report to final outturn data. The scale of change is detailed in Annex A.

Reconciliations set out in this document

With consideration to the availability of outturn and population data as established above, the following reconciliations have been calculated and included in this report:

• Final BGA and revenue reconciliations for 2023-24 Scottish Income Tax;
• Final BGA reconciliations for 2024-25 LBTT and SLfT, and;
• Provisional BGA reconciliations for 2024-25 Social Security benefits

Due to the use of provisional data, the overall reconciliation applying to the 2026-27 Scottish Budget cannot be finalised at this point, but will be confirmed in the 2026-27 Scottish Budget document. To give an idea of the scale of change between provisional and final reconciliations, Table 1 shows the difference between reconciliations detailed in previous outturn reports and the reconciliation applied to the Scottish Budget.

Note 1: The negative 318.7m reconciliation in 2020 and 14.7m reconciliation in 2021 were what was applied to the 2021-22 and 2022-23 Scottish Budgets and doesn’t include a subsequent reconciliation to account for HMRC’s revision to 2017-20 Income Tax outturn. The Scottish Government received a £20.6m positive reconciliation, £7.9m of which was for 2018-19 Income Tax that would have been applied to the 2021-22 Scottish Budget and £6.9m of which was for 2019-20 Income Tax that would have been applied to the 2022-23 Scottish Budget.

When outturn isn’t available within two months of the Scottish Budget, the Scottish Government has the option to use provisional outturn and defer the impact to the following Budget. The £499.9 million reconciliation applied to the 2025-26 Scottish Budget contains provisional DWP outturn for England and Wales social security. Had final outturn been applied at the time of the Budget, the reconciliation would have been £492.7 million. Scottish and UK Government officials will arrange for the impact of the deferral to be applied to the upcoming Scottish Budget.

Considerations for 2025-26 Scottish Budget

The following points are relevant for 2026-27 Budget considerations:

• The total provisional reconciliation required in the 2026-27 Budget will be positive £361.5 million. This figure includes final reconciliations for 2023-24 Income Tax revenue and BGA, final reconciliations of the BGAs for 2024-25 LBTT and SLfT, and provisional reconciliations of the BGAs for 2024-25 Social Security benefits.
• This reconciliation doesn’t include the deferred reconciliation for social security outturn discussed in paragraph 13. This deferral will reduce the positive reconciliation by £7.2 million.
• This positive reconciliation is largely driven by an Income Tax reconciliation of £405.7 million. The combined reconciliation for LBTT, SLfT and Social Security benefits expenditure is negative £44.1 million.
• The provisional residual balance on the reserve for 2024-25 is £556.6 million.
• The Scottish Government’s capital debt was £2.2 billion by the end of 2024-25, 26 per cent below the £3.1 billion limit.

Corrections to outturn

Since Autumn Statement 2022, several changes to outturn have been identified. SG and HMT will reach a decision on the handling of this outturn and further information will be published in due course. As previous BGAs are a component of new BGA calculations, outturn changes will be reflected in future BGA calculations regardless of the decision on whether a reconciliation will flow from these changes to outturn.

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