GERS EXPLORER 2025-26
This tool is intended for informational purposes only and is designed to aid in the understanding of how the GERS figures are arrived at and how much the various sources of Revenue or areas of expenditure contribute to the overall fiscal balance. The explorer allows the user to tweak the % allocations of UK totals.
The explorer makes the assumption that Scotland's allocation of a UK wide source of revenue or area of expenditure cannot exceed 250%. While this is unrealistic, it allows the user some creative license.
You can jump between the Revenue and Expenditure tabs either by clicking on the tab or on the relevant section of the 'Fiscal Balance' donut chart.
Note: we are calculating the allocations on the explorer using the baseline % allocations to 3 decimal places. This may result in a slight difference to the GERS publication. Please see the facts section for the published values.
To modify a particular Revenue or Expenditure item please click on the relevant section in the bar charts. You can then adjust the % allocation made under GERS. A summary of all the changes you have made to achieve your own net fiscal balance calculation are shown on the 'User Changes' tab.
We provide two reference sets of allocations.
- GERS 2025-2026: This resets the values to the allocations arrived at by the Scottish Government.
- Population Share: This resets the values to a Population Share of all line items.
Reset to either of these reference sets on the 'User Changes' tab.
Note: This explorer is not an economic model of an independent Scotland and makes no attempt to model the real world impact of changing individual revenue and expenditure line items on the Scottish economy.
{{selectedRevenueCategoryLabel}} (£{{revenueScotland[selectedRevenueCategoryIndex].format(0,3)}}m or {{revenueSlider[selectedRevenueCategoryIndex].format(1,3)}} % of £{{revenueUK[selectedRevenueCategoryIndex].format(0,3)}}m )
Income Tax
Background
Income tax is the single largest source of public sector revenue in both Scotland and the UK. A taxpayer's income is assessed for income tax according to a prescribed order:
(1) non-savings and non-dividend (NSND) income,
(2) savings income,
(3) dividend income.
NSND income tax covers around 90% of income tax, with a small amount (around 1%) of income tax being paid on savings, and the remainder of income tax paid on dividend income.
Since 2017-18, a different tax regime applies to non-savings income, income tax in Scotland. This is referred to as Scottish Income Tax. Although the personal allowance continues to be set for the whole of the UK, the subsequent rates and bands for NSND income tax are now set by the Scottish Government. Savings and dividend income continues to be taxed at the same rates across the UK. Information on the UK personal allowance and the rates and bands for reserved income tax is available at:
https://www.gov.uk/personal-tax/income-tax
The table below shows the income tax rates and bands for NSND income tax in Scotland for 2025-26. Further information on Scottish Income Tax is available at :
https://www.gov.scot/policies/taxes/income-tax/
Income tax rates for Scotland in 2025-26
| Band | Band name | Rate |
| Over £12,571 to £14,732 | Starter | 19% |
| Over £14,877 to £26,561 | Basic | 20% |
| Over £26,562 to £43,662 | Intermediate | 21% |
| Over £43,663 to £75,000 | Higher | 42% |
| £75,001 to £125,140 | Advanced | 45% |
| Over £125,140 | Top | 48% |
Consistent with the presentation of income tax used by the OBR and ONS, the income tax line in GERS also includes a number of smaller taxes. These are:
- Company income tax;
- Household charitable donations via gift aid;
- Non-profit institutions serving households tax credits.
Methodology
The approach for estimating Scottish revenue for each line is summarized in the table below. UK figures for income tax and associated revenue are taken from ONS’ database underlying the Public Sector Finances.
The main apportionment for income tax is HMRC’s Scottish Income Tax statistics. This is administrative outturn data on NSND income tax for all Scottish income tax payers.
| Revenue | Description | Methodology |
| Income tax | The main tax on personal incomes in the UK. This is split into income tax collected through pay as your earn (PAYE) and income tax collected through self-assessment. | Prior to 2016-17: Apportioned to Scotland on the basis of income tax liabilities from Survey of Personal Incomes (SPI) data 2016-17 onwards: Apportioned to Scotland on the basis of income tax liabilities from Scottish Income Tax. |
| Company income tax | Where properties in the UK are owned by non‑residents, the non-resident is treated as a company, but rather than paying corporation tax pays income tax on income earned income from these properties, such as rental income. | Apportioned to Scotland on the basis of Scotland’s proportion of the UK GVA. |
| Household charitable donations via gift aid | When UK income tax payers donate to charity, the charity can claim an extra 25p for every £1 donated. | As income tax |
| Non-profit institutions serving households tax credits | Tax credits paid to non-profit institutions serving households, typically charities. | As income tax |
Data are taken from the latest outturn statistics for Scottish Income Tax, published by HMRC. The publication provides a breakdown of Scottish Income Tax by self-assessment and by pay as you earn (PAYE) for the years 2016-17 to 2024-25. It also provides indicative information on PAYE income tax for 2025-26 through the real time information system.
Scottish and Welsh Income Tax Outturn Statistics - GOV.UK
Income tax is split into income tax from PAYE and self-assessment. This reflects the different way these taxes are recorded in the Public Sector Finances. For PAYE, the Public Sector Finances shows income tax against the year that the income was earned. For example, PAYE income tax for 2024-25 shows tax paid on income earned in 2025-26.
For self-assessment, the Public Sector Finances show the income tax at the time it was paid. For example, self-assessment income tax for 2025-26 shows the tax which was paid in 2025-26, which primarily relates to income earned during the 2024-25 tax year.
GERS therefore apportions PAYE income tax and self-assessment income tax separately. For PAYE, the Scottish share is taken as the share of NSND PAYE Scottish Income Tax liabilities for that year. For 2025-26, the growth rate in indicative income tax from the real time information system is used to determine the Scottish share.
For self-assessment, the Scottish share is taken as the share of NSND self-assessment Scottish Income Tax for the previous year. That is, the share of self-assessment liabilities in 2024-25 is applied to UK self-assessment income tax receipts for 2025-26. This methodology assumes that self-assessed income tax received in 2025-26 relates to income tax liabilities from 2024-25. This is a simplification, as many self-assessed income tax payers will make pre-payments of their income tax, known as payments on accounts. This methodology will continue to be reviewed in conjunction with users.
This methodology is applied from 2016-17 onwards, which is the period that information is available collected using new Scottish taxpayer identifiers on income tax returns. For previous years, the Scottish share of income tax liabilities from the Survey of Personal Incomes (SPI) continues to be used. GERS uses the SPI data excluding taxpayers with no postcode information for this calculation.
No change.
Corporation Tax
Background
Corporation tax is a tax on a company’s taxable income or profits. Different rates apply depending upon the amount of profit raised. There are a number of special accounting rules for particular expenditures, such as capital investment and research and development, which qualify for tax allowances and reliefs. Details of the current tax allowances and tax rates are available at:
Business tax: Corporation Tax - detailed information - GOV.UK (www.gov.uk)
In the November 2022 Autumn Statement, the UK Government announced an additional Electricity Generator Levy, which came into effect on 1 January 2023 and is included within corporation tax revenue in GERS. The levy is intended as a temporary 45% charge on exceptional receipts generated from the production of wholesale electricity. Exceptional receipts will be defined as amounts from wholesale electricity sold at an average price in excess of a benchmark price of £75/MWh over an accounting period. This benchmark price will be adjusted in line with the Consumer Price Index from April 2024.
There are different rates and rules governing corporation tax of North Sea output. These are discussed in more detail later in this note.
Methodology
In general, GERS apportions a share of UK revenues from corporation taxes based on the economic activity undertaken in Scotland and not the location of companies’ headquarters. Public corporations’ and North Sea corporation tax revenues are excluded from the analysis and are apportioned to Scotland separately.
Calculating Scottish corporation tax revenues is a two stage process. Firstly the UK figure for total corporation tax is taken from ONS’ database underlying the Public Sector Finances. An adjustment is then made to remove corporation tax payments from the North Sea sector.
The Scottish share of UK corporation tax (excluding North Sea) is taken from the ONS Country and Regional Public Sector Finances publication.
Country and regional public sector finances - Office for National Statistics (ons.gov.uk)
Differences from Previous Year’s Methodology
No change.
VAT Refunds
Background
Some public sector bodies receive refunds of VAT that they have paid in respect of contracted out services for non-business purposes, including the free-to-enter public museums. As this VAT is recovered, it is netted out in departmental budgets. In the National Accounts, as these VAT payments by general government bodies form part of the prices paid as a final consumer, they are added back into government expenditure to show gross expenditure. A symmetric adjustment is made to revenues to show VAT receipts gross of these refunds.
Methodology
VAT refunds from local government and central government are apportioned differently. Local government VAT refunds are apportioned on the basis of Scotland’s share of UK local government final consumption expenditure.
Central government VAT refunds:
- to the Ministry of Defence are assigned on the basis of Scotland’s share of the UK population;
- to NHS are assigned on the basis of Scotland’s share of UK Total Expenditure on Services on health;
- to other government departments – on basis of Scotland’s share of total UK Total Expenditure on Services (less Ministry of Defence and NHS).
Differences from Previous Year’s Methodology
No change.
Capital Gains Tax
Background
Capital gains tax (CGT) is a tax on capital gains from the buying and selling of assets. The capital gain is broadly the difference between the disposal proceeds and the cost of acquiring an asset. Individuals have an annual amount on which CGT is not liable and as with other forms of personal taxation various reliefs and exemptions are available.
Prior to June 2010 capital gains tax was charged at a flat rate of 10%. In June 2010, it has been charged at a basic rate of 18% and a top rate of 28% for higher-rate taxpayers. This was then changed again in 2016-17, and the tax rate now depends on whether the asset is a residential property or not.
- For higher rate tax payers: 24% on residential property;
- other assets. - 18% April to October 2024, 24% October 2024 onwards.
- residential property - 18%
- other assets - 10% April to October 2024, 18% October 2024 onwards.
Details of the current tax allowances and tax rates are available at:
Capital Gains Tax: what you pay it on, rates and allowances: Overview - GOV.UK (www.gov.uk)
Methodology
The UK figure for total CGT is taken from ONS’ database underlying the Public Sector Finances.
ONS produces estimates of the amount of revenue raised from capital gains tax in Scotland for each financial year. These annual figures are converted to quarterly estimates, and the proportion of the UK revenue raised in Scotland based on these figures is applied to the UK total. The latest estimates of Scottish revenues are for 2024-25.
The Scottish share of UK corporation tax (excluding North Sea) is taken from the ONS Country and Regional Public Sector Finances publication.
Country and regional public sector finances - Office for National Statistics (ons.gov.uk)
Differences from Previous Year’s Methodology
No change.
Other taxes on income and wealth
Background
Other taxes and royalties comprise a number of relatively small public sector revenue sources. Each of which is apportioned to Scotland separately.
Methodology
UK revenue from other taxes is apportioned to Scotland as follows
| Revenue | Background | Methodology |
| Betting and gaming duties | A tax on various forms of gambling. There are six different betting and gaming duties each of various rates. For example, there is a 15% tax on bookmakers’ gross profits and for non-UK established online betting and gaming operators. | Scottish share of expenditure on gambling products is estimated using the Living Costs and Food Survey (LCF), |
| Horserace betting levy board | A levy on bookmakers and the Tote to fund the horserace betting levy board. | Scottish share of expenditure on gambling products is estimated using the Living Costs and Food Survey (LCF), |
| Climate change levy | A levy chargeable on the industrial and commercial supply of lighting, heating and other sources of power used by industry, commerce, agriculture, public administration and other services. The levy does not apply to domestic consumers or to charities. Different rates apply for different sources of power. | Based on Scottish consumption of electricity and gas, from BEIS. |
| Aggregates levy | A tax on the commercial exploitation of rock, sand and gravel. It is charged at a flat rate per tonne | Based on Scottish Fiscal Commission estimates. |
| Non-Fossil Purchasing Agency levy income | OFGEM’s Non-Fossil Purchasing Agency sells renewable electricity produced under Non-Fossil Fuel Obligation orders, and may charge a levy to cover any losses it makes | As for renewable energy obligations |
| Apprenticeship levy | A tax on employers which can be used to fund apprenticeship training. | Taken from the ONS publication Country and Regional Public Sector finances. |
| Soft drink levy | A tax on drinks above a specified level of sugar content. | Scottish share is estimated using the Living Costs and Food Survey (LCF), |
| Fossil Fuel Levy | For years up to 2002/03, this was a levy paid by suppliers of electricity from non-renewable energy sources in the UK. The costs were passed to the consumers in the cost of the electricity supplied. The fossil fuel levy was imposed to fund the Non-Fossil Fuel Obligation. | Based on GVA share |
| Immigration and Health charge | A fee paid by migrants resident in the UK for more than six months. | As for the immigration skills charge |
| Immigration skills charge | A charge on employers who employ foreign workers | As for the apprenticeship levy. |
| Consumer Credit Act fees | The Consumer Credit Act requires businesses that offer credit or lend money to consumers to be licensed by the OFT. This includes where credit is arranged to finance the purchase of goods or services. | Apportioned to Scotland on the basis of Scotland’s proportion of the UK population. |
| Northern Ireland domestic rates | Not applicable to Scotland | |
| To levy funded bodies | Statutory bodies which impose a compulsory charge on industry members and exist only in the agricultural sector. | Scotland share of agriculture GVA. |
| Regulatory fees | Fees and levies intended to be raised for regulatory bodies such as the FSA, the Financial Services Ombudsman and Financial Services Compensation Scheme. | Apportioned to Scotland on the basis of Scotland’s proportion of the UK population. |
| Boat licences | Apportioned to Scotland on the basis of Scotland’s proportion of the UK population. | |
| Milk super levy | UK-administered quota system on milk production introduced by the EU in 1984 to curb excess production. If a producer exceeds the quota an annual super levy is charged and used to pay for disposal. | Apportioned to Scotland on the basis of Scotland’s proportion of UK agricultural GVA. |
| National lottery | This is the contribution that Camelot makes to the National Lottery Distribution Fund (not part of betting and gaming duty). | Method as for betting and gaming duty – using Scotland’s proportion of estimated UK spend on betting etc as estimated by the Living Costs and Food Survey. |
| Rail franchise premia | Train operators pay the government a set fee for the right to run services on the rail network. The franchises usually run for 10 years. | On the advice of ONS, Scotland is allocated 6.7% of this revenue. |
| Fishing licences | These relate to Environment Agency rod licences in England and Wales. No fishing/rod licence is required for fishing in Scotland (although as per England and Wales a fishing permit is often requested by a local water authority or land owner). | None for Scotland |
| Passport fees | Apportioned to Scotland on the basis of Scotland’s proportion of the UK population. | |
| TV licences | Apportioned to Scotland on the basis of Scotland’s proportion of the UK’s estimated number of private households. | |
| Accounting adjustment | Adjustment to constrain total UK revenue to be consistent with the latest public sector finances | Apportioned to Scotland on the basis of Scotland’s proportion of the UK population. |
Differences from Previous Year’s Methodology
There has been a change in the methodology for apportioning the Apprenticeship levy (which was previously calculated as the Scottish share of employment in enterprises assumed to be subject to the levy) and the Immigration Skills levy (which was previously calculated from the Scottish share of relevant foreign worker employment.
National Insurance
Background
National insurance contributions (NICs) are a tax on earnings. Their payment is designed to allow the payee to build an entitlement to certain social security benefits, including the state pension. There are a number of different rates, thresholds and classes for national insurance. The main rate, known as the class 1 rate, was unchanged between 2011-12 and most of 2023-24 at 12% for employees and 13.8% on employers. In January 2024 the main rate for employees was cut to 10%, and in April 2024 it was cut further to 8%. There have also been changes to thresholds during this period.
Most recent changes are described here
For details of current thresholds and rates please see:
https://www.gov.uk/national-insurance-rates-letters/contribution-rates
Methodology
The UK figure for total NICs from ONS’ database underlying the Public Sector Finances is apportioned using Scotland’s share of UK class 1 NICs separately for employees and employers, using data from HMRC’s Real Time Information system provided by HMRC.
Differences from Previous Year’s Methodology
No change.
Value Added Tax
Background
Value added tax (VAT) is charged on the sale of most goods and services in the UK. Depending upon the product, VAT is charged at three different rates; during the period of the report these were: standard rate, reduced rate (5%) and zero rate. Certain services are also ‘exempt’ from VAT.
The standard rate of VAT was temporarily reduced from 17.5% to 15% on 1 December 2008, and it returned to 17.5% on 1 January 2010. The standard rate of VAT increased from 17.5% to 20% on 4 January 2011. For further details please see:
VAT rates - GOV.UK (www.gov.uk)
Methodology
The UK figure for total VAT revenues is taken from ONS’ database underlying the Public Sector Finances. VAT revenue is then disaggregated into VAT paid by households, businesses, government, and the housing sector.
Scotland’s share of UK VAT revenues is taken from HMRC’s Scottish VAT assignment statistics. This shows the results of the VAT assignment model jointly developed by the Scottish and UK Governments. The approach used in the VAT assignment model is very similar to that previously used in GERS. VAT is split between a number of sectors, such as households, business and government, and Scotland’s share of these sectors is estimated individually to derive an estimate of overall VAT. The VAT assignment methodology extends the approach previously used in GERS to explicitly consider VAT from tourism, and incorporates adjustments for elements such as the Retail Export Scheme and traders below the VAT schedule. Information on the results are available at:
Scottish VAT Assignment – Experimental Statistics - GOV.UK (www.gov.uk)
The latest estimates from the VAT assignment model are for 2022. This shows the Scottish share continuing to recover from a low figure in 2020 due to a fall in domestic tourism during the pandemic.
Differences from Previous Year’s Methodology
No change.
Fuel Duties
Background
Fuel duty, formally known as hydrocarbon oil duty, is an excise duty levied on the sale of oils (including road fuels). The rate of duty levied varies between fuel types. Information on current duty rates is available from:
Business tax: Fuel Duty - detailed information - GOV.UK (www.gov.uk)
Methodology
The UK figure for total fuel duties is taken from ONS’ database underlying the Public Sector Finances. This is split into duty paid on petrol and duty paid on diesel using data from HMRC’s Hydrocarbon Oils Duties bulletin.
Hydrocarbon Oils Bulletin - GOV.UK
As with other excise duties, the estimation of revenues raised from fuel duty in Scotland is based on the premise that the burden of duty is borne by the final consumer.
Fuel duty revenues are apportioned to Scotland by estimating Scotland’s share of UK fuel consumption. UK road traffic fuel consumption and a regional breakdown, based on weighted traffic flows on a sample of roads across the UK, are published by the Department for Energy Security and Net Zero (DESNZ). Using this information Scotland’s share of UK petrol and diesel consumption is derived. These estimates are then applied to the figure for UK revenue from each source to estimate Scotland’s share of total fuel duty.
Differences from Previous Year’s Methodology
No change.
Reserved Stamp Duties
Background
Stamp duty is levied on conveyances and transfers of land and property and on share transactions. Since 1 April 2015, stamp duties on transfers of land and property in Scotland have been devolved to the Scottish Parliament, and only stamp duty on share transactions remains reserved.
For details on the rates of UK duty, please see:
Completing a stock transfer form - GOV.UK (www.gov.uk)
Stamp duties in GERS also include the Annual Tax on Enveloped Dwellings, which was introduced in April 2013. This is a tax payable by companies that own residential property valued at over £2 million. Further information is available at:
Annual Tax on Enveloped Dwellings - GOV.UK (www.gov.uk)
Methodology
The UK figure for revenue from reserved taxes is taken from ONS’ database underlying the Public Sector Finances.
Separate methods are used for estimating Scotland’s share of UK revenue raised from (1) stocks and shares stamp duties, and (2) the annual tax on enveloped dwellings.
- Stocks and Shares Stamp Duty
The Scotland/UK ratio stamp duty on stocks and shares is taken from the ONS publication Country and Regional Public Sector finances.
- Annual tax on enveloped dwellings
HMRC publishes estimates of receipts from this tax in Scotland, based upon the share of transactions of residential property valued above £1 million. This is used in place of administrative data in order to meet disclosure rules.
Differences from Previous Year’s Methodology
No change.
Tobacco Duties
Background
Tobacco excise duty is a tax charged on cigarettes, cigars, hand rolling, pipe and chewing tobacco. Duty on cigarettes is based on a percentage of the recommended retail price, plus a specified charge per 1,000 cigarettes. Duties on cigars, hand rolling, pipe and chewing tobacco are charged according to weight. There are no exemptions or reliefs for tobacco duty. The rates of duty are set each UK Budget. For details on the rates of duty please see: Tobacco duty rates - GOV.UK (www.gov.uk)
Methodology
As with alcohol (see below), the estimation of tobacco duty raised in Scotland is based on the premise that the burden of duty is borne by the final consumer.
UK tobacco duty revenues are taken from ONS’ database underlying the Public Sector Finances. Scotland’s share of total UK private household expenditure on tobacco products is then used to derive the proportion of duty attributable to Scotland.
Expenditure on tobacco products is estimated using the Living Costs and Food Survey (LCF), formerly the Expenditure and Food Survey (EFS), which collects information on average household spending patterns on a wide variety of products including tobacco. The latest Scottish annual data are for 2024-25. Total weekly spend is then estimated by multiplying average household spend by the number of households in Scotland and the UK. The ratio of tobacco expenditure in Scotland and the UK is then applied to total UK tobacco revenue to estimate the proportion of tobacco duty attributable to Scotland.
Differences from Previous Year’s Methodology
No change
Alcohol Duties
Background
Alcohol excise duty is a flat-rate duty on alcoholic beverages. Duty on spirits is calculated per litre of pure alcohol; cider, perry, wine and made wine are dutied in bands of alcoholic strength and calculated by volume; beer duty is calculated by strength and volume. Since flat-rates are expressed in cash terms, they are revalorised (i.e. increased in line with inflation) each year. For details of current rates of duty please see:
Business tax: Alcohol duties - detailed information - GOV.UK (www.gov.uk)
Methodology
The estimation of alcohol duty raised in Scotland is based on the premise that the burden of duty is borne by the final consumer rather than the producer.
UK alcohol duty revenues are taken from ONS’ database underlying the Public Sector Finances for:
- Spirits;
- Cider and perry;
- Wine; and
- Beer.
Scotland’s share of total UK private household consumption of these different alcohol products is then used to derive the proportion of duty attributable to Scotland.
Expenditure on alcoholic products is estimated using the Family Food Survey published by DEFRA, which collects information on average household spending patterns on a wide variety of products including alcohol. Total weekly consumption is then estimated by multiplying average personal consumption spend by the estimated population in Scotland and the UK. The ratios of total consumption in Scotland and the UK of spirits, cider and perry, wine, and beer are then applied to UK alcohol duty revenues to estimate Scotland’s share. The latest Scottish data are for 2024-25.
Differences from Previous Year’s Methodology
No change
Air Passenger Duty (APD)
Background
Air passenger duty (APD) is levied on the carriage, from a UK airport, of chargeable passengers on chargeable aircraft. There are currently four rates of duty with exemptions for certain flights, e.g. flights from the Highlands and Islands of Scotland. For details of current rates and exemptions please see:
Business tax: Air Passenger Duty for plane operators - detailed information - GOV.UK (www.gov.uk)
Methodology
GERS uses the latest SFC estimates for Air Passenger Duty raised in Scotland.
Differences from Previous Year’s Methodology
No change
Insurance premium tax (IPT)
Background
Insurance premium tax (IPT) is a tax on general insurance premiums. IPT is payable on most types of insurance in the UK and on foreign travel insurance for trips lasting less than four months. There are two rates: a standard rate of 10% and a higher rate of 20% depending upon the type of insurance purchased. There are some exceptions to IPT including life insurance. For further details please see:
Business tax: Insurance Premium Tax - detailed information - GOV.UK (www.gov.uk)
Methodology
The UK figure for total IPT is taken from ONS’ database underlying the Public Sector Finances.
The estimation of IPT revenues raised in Scotland is based on the premise that the burden of duty is borne by the final consumer.
Expenditure on insurance is estimated using the Living Costs and Food Survey (LCFS), formerly the Expenditure and Food Survey (EFS), which collects information on average household spending patterns on a wide variety of products including insurance. The latest Scottish data are for 2024-25. Total weekly spend is then estimated by multiplying average household spend by the number of households in Scotland and the UK. The ratio of insurance expenditure in Scotland and the UK is then applied to UK insurance premium tax revenues to estimate the value of insurance premium tax revenues attributable to Scotland.
Differences from Previous Year’s Methodology
No change
Scottish Landfill Tax
Background
Landfill tax is a tax on the disposal of waste and is paid on top of normal landfill fees. Different rates are applied according to the type of waste being disposed of. In Scotland, Scottish Landfill Tax replaced the UK tax from 1 April 2015. Further details and rates are available at
Scottish Landfill Tax | Revenue Scotland
For further information on the UK tax, which also applied in Scotland prior to 1 April 2015, please see:
Business tax: Landfill Tax - detailed information - GOV.UK (www.gov.uk)
Methodology
For years prior to 2015-16, the UK figure for total landfill tax is taken from ONS’ database underlying the Public Sector Finances.
The proportion of the UK total tonnage of waste sent to landfill in Scotland is used to apportion total UK landfill tax to Scotland, but with an adjustment applied to reflect the fact that Scotland’s outturn share of UK landfill tax is higher than this amount.
From 2015-16 figures reflect outturn data from Revenue Scotland. For years prior to 2025-26, figures are consistent with Revenue Scotland’s latest Annual Report - Devolved Taxes Accounts. For 2025-26, figures are based on the in-year reported amounts. There may be small differences due to timing adjustments.
Differences from Previous Year’s Methodology
No change .
Inheritance Tax
Background
Inheritance tax is a tax on assets, exceeding a minimum threshold, transferred on or shortly before death. An individual’s estate on death for inheritance tax purposes is made up of a range of assets including those held directly in their name, their share of jointly owned assets and various other forms of asset. Further information regarding exemptions is available from:
Personal tax: Inheritance Tax - detailed information - GOV.UK (www.gov.uk)
Methodology
The UK figure for total inheritance tax is taken from ONS’ database underlying the Public Sector Finances.
HMRC produces estimates on the amount of revenue raised from inheritance tax in Scotland. The proportion of the UK revenue raised in Scotland based on these figures is applied to the total UK figure obtained from the ONS’ database. The latest HMRC data are for 2021-22.
The Scottish share of UK corporation tax (excluding North Sea) is taken from the ONS Country and Regional Public Sector Finances publication.
Country and regional public sector finances - Office for National Statistics (ons.gov.uk)
Differences from Previous Year’s Methodology
No change.
Vehicle Excise Duty (VED)
Background
Vehicle excise duty (also known as road tax) is an annual charge paid by vehicle owners. For cars registered since 2001, duty is charged according to the emissions of the vehicle and the type of fuel used. For older cars, duty is charged according to the engine size. For details of current rates of duty please see: Vehicle tax rates: Cars registered on or after 1 April 2017 - GOV.UK (www.gov.uk)
Methodology
The UK figures for both vehicle excise duty from households and vehicle excise duty from businesses are taken from ONS’ database underlying the Public Sector Finances. These figures are disaggregated into Great Britain’s (GB) revenues and revenues from Northern Ireland, as in Northern Ireland the duty is collected separately by the Northern Ireland Vehicle Agency. Northern Ireland data is not used in the apportionment to Scotland, but is used in producing UK totals published in GERS.
Data published by DVLA on the numbers of licensed vehicles, by type of vehicle, in each region of the UK are used to estimate Scotland’s share of GB vehicle excise duty.
Differences from Previous Year’s Methodology
No change
Non-Domestic Rates
Background
In general, non-domestic rates, or business rates, are levied on occupiers of non-residential properties such as shops, offices, warehouses and factories. In Scotland, rates are calculated by multiplying a property’s rateable value, set by the local assessor, by the poundage rate, set by the Scottish Government. The basic poundage rate in Scotland in 2024-25 was 49.8 pence; i.e., a property with a rateable value of £10,000 would pay non-domestic rates of £4,980.
In addition, businesses with a rateable value of more than £51,000 and less than £100,000 in 2024-25 pay an intermediate supplement of 1.3 pence, and those with a rateable value of more than £100,000 pay a higher supplement of 2.6 pence. Between 2012-13 and 2014-15 large retail properties which are licenced to sell alcohol for consumption off premises and with a rateable value of more than £300,000 pay a Public Health Supplement of 13 pence.
Methodology
For earlier years the figure for Scotland is taken directly from Scottish Local Government Financial Statistics.
Non-domestic rates income statistics - gov.scot
The latest year’s figure uses the published mid-year estimate.
Non-domestic rates income statistics - gov.scot
Differences from Previous Year’s Methodology
No change.
Land and Buildings Transaction Tax (LBTT)
Background
Land and Buildings Transaction Tax replaced the UK Stamp Duty from 1 April 2015. It is a tax on purchases of commercial and residential land and buildings. The structure of the tax is designed so that the charge is proportionate to price of the property. From 1 April 2016, an additional supplement is applied to purchases of additional residential properties in Scotland, such as buy-to-let properties and second homes.
For further details and rates see:
Land and Buildings Transaction Tax | Revenue Scotland
Methodology
Figures reflect outturn data from Revenue Scotland. For years prior to 2025-26, figures are consistent with Revenue Scotland’s latest Annual Report - Devolved Taxes Accounts. For 2025-26, figures are based on the in-year reported amounts. There may be small differences due to timing adjustments.
Differences from Previous Year’s Methodology
No change
Environmental levies
Background
Environmental levies consist of Carbon Reduction Commitment and Renewables Obligation payments.
The Carbon Reduction Commitment is a mandatory scheme which aims to improve energy efficiency and cut emissions in large public and private sector energy users across the UK. Participants must monitor their energy supplies and purchase allowances to cover the associated CO2 emissions.
The Renewables Obligation places an obligation on UK electricity suppliers to source an increasing proportion of the electricity they supply from renewable sources. Operators require certificates for the energy they generate. Certificates can be traded between operators to ensure they have sufficient to meet their scheme targets. As the scheme is mandatory, payments associated with it are regarded as a tax, even when they are not made directly to the government. As such, revenue and expenditure associated with the scheme by energy operators are included as both an imputed tax and subsidy in the public sector finances. This does not affect the fiscal balances.
Methodology
Scotland is allocated a share of Carbon Reduction Commitment revenue in line with its share of UK electricity consumption by industry. This is taken from the BEIS Sub-national electricity consumption data.
https://www.gov.uk/government/collections/sub-national-electricity-consumption-data
Figures for the Renewables Obligation are based on data on payments made by operators in Scotland, based on data provided directly by ONS.
Differences from Previous Year’s Methodology
No change
Council Tax
Background
Full council tax is levied on occupiers of a house which is their sole or main residence. There are a range of exemptions and reliefs from council tax, including a 25% reduction for single occupancy households, and between 10% and 50% reduction for dwellings which are not the main residence (i.e. second homes). For further details about exemptions and reliefs from council tax please see: https://www.gov.uk/council-tax
Methodology
Council tax receipts for Scotland are taken directly from the Scottish Government’s Council Tax Collection Statistics.
Council Tax Collection Statistics, 2024-25 - gov.scot
Since the collection year for the latest rate is provisional and is typically an underestimate due to late payments, the accrued estimate for the latest year has been taken as the net amount billed multiplied by the historic collection rate across all years.
Differences from Previous Year’s Methodology
No change.
Interest and Dividends
Background
This revenue element includes all interest and dividend payments received by the public sector from the private sector and the rest of the world. Interest payments received by public sector bodies from other UK public sector bodies are not included.
Methodology
UK figures for interest and dividend revenue received by (a) public corporations, (b) local government and (c) central government and (d) public sector pensions, are obtained from ONS’ database underlying the Public Sector Finances. Following advice from the OBR, central government interest income is split into interest received from student loans and other interest income. Following the reclassification of housing associations into the public sector, public corporation interest income is split into housing association and non-housing association income.
UK central government student loans income is estimated for Scotland using actual Scottish receipts in the ONS PSAT2 database. Local government and other central government revenues from interest and dividends are apportioned to Scotland using Scotland’s share of UK population. Interest income relating to public sector pensions is apportioned using public sector GVA.
Income for Scottish housing associations is taken directly from the Scottish series for the UK Public Sector Finances. Interest income for other public corporations is apportioned using public sector GVA.
Differences from Previous Year’s Methodology
No change
Gross Operating Surplus (GOS)
Background
Gross operating surplus (GOS) refers to the operating (or trading) surpluses (or losses) of central government, local government and public corporation trading activity.
By definition, general government GOS is equal to general government non-market capital consumption. This is a measure of the amount of fixed capital resources used up in the production process (i.e. depreciation). Since this is a public sector receipt, that does not raise actual funds, it is balanced by an offsetting item within public expenditure. By definition, the adjustment item (NMCC) is added to public expenditure rather than subtracted on the revenue side.
For public corporations, the GOS figure includes the gross trading surplus, rental income, stock appreciation (or holding gains), and FISIM (Financial Intermediation Services Indirectly Measured).
Methodology
In calculating GOS for Scotland, separate figures are estimated for:
- Central government
- Local government
- Public corporations
1. The UK revenue for central government GOS is taken from ONS’ database underlying the Public Sector Finances.
It is apportioned to Scotland according to Scotland's share of UK NMCC for central government obtained from SG Input Output tables.
2. The UK revenue for local government GOS is taken from ONS’ database underlying the Public Sector Finances.
It is apportioned to Scotland according to Scotland’s share of UK NMCC for local government obtained from SG Input Output tables.
3. Scotland’s share of GOS for public corporations is taken from the ONS Country and Regional Public Sector Finances.
The approach taken to estimate the GOS for public corporations in Scotland is different. The GOS of public corporations comprises the following elements –
- Gross trading surplus (from operating activities);
- Gross trading surplus (from artistic originals);
- Housing Revenue Account (HRA)
- Rental Income (excluding HRA)
- FISIM
- Holding Gains
For elements 1 and 4, revenue from every public corporation was obtained. Public corporations were classified as ‘Scotland’, ‘Not Scotland’, or ‘UK’, depending on their area of coverage. For those classified as ‘Scotland’, all of the revenue (Gross Trading Surpluses, Rental and FISIM) was assigned to Scotland. Public corporations classified as ‘Not Scotland’ were excluded. For ‘UK’ public corporations, revenue was apportioned to Scotland on the basis of the relevant industry GVA share.
Gross trading surpluses relating to artistic originals in general arise from the BBC and Channel 4. Scotland is apportioned a population share of this revenue.
For the Housing Revenue Account, figures were obtained directly for local authority rents in Scotland from ONS.
Differences from Previous Year’s Methodology
Central Government gross operating surplus has been changed to be apportioned with estimates of Non- market Capital Consumption for Central Government and Gross Operating Surplus for local Governmnet from the IO tables . This provides a more timely estimate. This change does not affect the net fiscal balance.
Other Receipts
Background
This revenue covers other non-tax revenue received by central government, local government and public corporation trading activity. The largest component is local government rental income.
The UK figure for rents and other current transfers is taken from ONS’ database underlying the Public Sector Finances.
Rents and other current transfers for central government, local governments and public corporations are estimated separately.
Central government rents and other current transfers comprise the following elements:
- Revenues for spectrum use in relation to licences for 3G mobile telephones
- Rents on land
- Water abstraction
- Other spectrum revenues
- Court fines
- Other, e.g. speed camera fines, charitable contributions to NHS trusts
Local government other receipts comprise income of insurance and pension funds allocated to local authorities as beneficial owners.
Public corporation other receipts relate to the activities of the Export Credits Guarantee Department.
A number of revenue items are netted off in this line, as part of consolidating revenue across the public sector:
- Business rates paid by local authorities in England
- Corporation tax paid by public corporation
Methodology
The methodology for apportioning these revenues to Scotland is shown below.
| Other receipts | Apportionment Methodology |
| Rents on land | Public sector GVA |
| Water abstraction | Public sector GVA |
| Other spectrum revenues | Public sector GVA |
| Court fines | Separate identification of ‘Scotland’ and ‘Non-Scotland’ revenues |
| Other, e.g. speed camera fines, charitable contributions to NHS trusts | Public sector GVA |
| 3G and 4G spectrum receipts | GVA |
| Local Government and public corporation receipts | Public sector GVA |
| Business rates paid by local authorities | Public sector GVA |
| Corporation tax paid by public corporations | As corporation tax |
Differences from Previous Year’s Methodology
No change
North Sea Oil & Gas
Background
North Sea revenue in GERS comes from three sources: petroleum revenue tax, corporation tax, and licence fees. The taxation or charging regime for each of these elements is as follows:
- Petroleum revenue tax (PRT): The PRT regime has changed significantly in recent years. Historically, PRT was charged at a rate of 50% on field-based profits from oil and gas extraction on fields given development approval prior to March 1993 at which time it was abolished for all new fields. There were deductions for all exploration, appraisal, and development costs on a 100% first year basis with an uplift of 35% for field investment costs prior to field payback. There were also volume and safeguard allowances.
- In the March 2015 Budget, the rate of PRT was reduced from 50% to 35%, with effect from 1 January 2016. This change was then superseded by a reduction in the rate to 0% in the March 2016, which applied retrospectively from 1 January 2016. As companies are still able to claim refunds on PRT paid in previous years against current trading losses and decommissioning spending, PRT receipts will only be negative in the future under the current tax regime.
- Corporation tax: Ring-fenced corporation tax was charged at a rate of 30% on profits net of any PRT payments. A Supplementary Charge is levied on top of corporation tax. The Supplementary Charge has subsequently been decreased to: 30% from December 2014;
- 20% from January 2015;
- 10% from January 2016;
- Energy Profits Levy: On 26 May 2022, the UK Government introduced a new Energy Profits Levy. This is an tax on UK oil and gas profits on top of the existing taxes. It was initially set at 25%, before being increased to 35% in the Autumn Statement on 17 November 2022.
- Taken together, corporation tax, the supplementary charge, and the Energy Profits Levy result in an overall tax rate on ring-fenced oil and gas profits of to 75%.
- Licence Fees: The UK Government grants licences for operators to "search and bore for and get"[1] petroleum in specified areas for a set period of time. Operators pay an annual fee for holding these licences. Licence fees are charged at an escalating rate on each square kilometre that the licence covers.
[1] Petroleum Act 1998 - Petroleum Act 1998 (legislation.gov.uk)
Methodology
Two estimates of Scotland’s share of North Sea revenue are adopted in the GERS report:
- A population share
- An illustrative geographical share
Under the population share approach, Scotland is allocated a share of the revenues associated with the North Sea based on its share of the UK population.
The illustrative geographical share is consistent with that used by the ONS in their Country and Regional Public Sector Finances publication.
Country and regional public sector finances - Office for National Statistics
This bases the Scottish boundary of the UKCS on the median line principle as employed in 1999 to determine the boundary between Scotland and the rest of the UK for fishery demarcation purposes. Other alternatives are possible. Scotland’s estimated geographical share of the North Sea sector, used in this report, is highlighted in Figure 1 below. Demarcation by the median line is highlighted by the dark shaded area. UKCS production, costs and revenue is allocated on a field by field basis to either the rest of the UK or Scotland using this boundary.
| Figure 1: UK Continental Shelf and Scottish Boundary |
| Source: Scottish Government |
Using this methodology, all fields in the Moray Firth, Northern North Sea, West of Shetland regions of the UKCS are allocated to Scotland. Fields in the Southern North Sea and Irish Sea are assigned to the rest of the UK. The Scottish boundary, based on the median line principle, intersects the Central North Sea (CNS) region. Fields in the CNS region to the north of the median line are assigned to Scotland and fields lying to the south assigned to the rest of the UK. No fields are intersected by the median line.
Differences from Previous Year’s Methodology
There has been no change in methodology since the previous edition of GERS.
North Sea revenue
North Sea revenue is subject to annual fluctuations and is driven by a number of factors, including:
- the oil price, the sterling dollar exchange rate, the natural gas price,
- production, operating expenditure, capital investment, and
- the prevailing fiscal regime.
Further commentary on fluctuations in revenues is provided in the background note
Oil and gas prices
Natural gas prices were broadly trending downwards for most of 2025-26 starting at around 80 pence per therm in April and falling to around 75 pence per therm by January. There were two successive price spikes in early 2026, the first seeing prices going from around 75 pence per therm to around 105 pence per therm over the first half of January with the second seeing a much larger surge from around 80 pence per therm to over 150 pence per therm mid March because of the onset of the war in the Middle East. The oil price fell from an average $68 per barrel in April 2025 to an average $66 per barrel in January 2026, notwithstanding a spike in June to around $80 per barrel. The onset of the war in the Middle East saw prices surge to around $110 per barrel in mid March (although prices in physical markets went higher still, to around $140 per barrel.[1] [2]
Production
Overall North Sea production of oil and gas fell by 2% in 2025-26 to 59 million tons of oil equivalent.[3] The decline came mainly because of natural gas with production down 3.7% compared to 2024-25 while oil production fell only marginally, by 0.2%.
In 2025 total expenditure on the UK Continental Shelf fell by 8.4% in real terms compared to 2024 to stand at £14.6 billion. The decrease was primarily driven by lower capital and operating expenditure, which fell by 12.8% and 9.4% respectively in real terms. Decommissioning expenditure rose by 8.6% while exploration and appraisal expenditure fell by 35%, although this represents only a very small part of overall expenditure and as such had a more limited impact on the overall change.[4]
Fiscal Regime
The UK fiscal regime in 2025-26 consisted of:
- offshore ring fence corporation tax (RFCT) at 30%,
- petroleum revenue tax (PRT) at 0% and
- a supplementary charge (SC) of 10%, and
- the energy profits levy (EPL) at 38%.[5]
The combined rate of tax on profits is 78%, although there exist a number of allowances, most notably for capital expenditure that mean companies face a different effective rate if they are making new investments in production and decarbonisation. The EPL is currently scheduled to end on 31 March 2030, after which the new Oil and Gas Revenue Levy (OGRL) will come into effect. However, under the Energy Security Investment Mechanism (ESIM), should both the six-month average oil and gas prices fall below preset thresholds, the EPL would immediately cease to apply ahead of the 2030 date.[6] The UK Government published the draft legislation on 13 July 2026.[7]
As shown in Table 2.1, in the online tables over half of oil and gas revenue in 2024-25 (latest available data) was raised via the EPL, the same as in 2023-24. The table also shows that PRT receipts are negative. This reflects the fact that, although companies no longer pay PRT, they can still claim refunds on PRT paid in previous years against current trading losses and decommissioning spending. As a result, PRT receipts will only be negative in the future under the current tax regime.[8]
[1] Europe Brent Spot Price FOB (Dollars per Barrel) (eia.gov)
[2] Wholesale gas prices - Reuters
[3] Energy Trends: June 2026 - GOV.UK
[4] Data and insights - Production and expenditure projections
[5] PRT is an allowable deduction in calculating profits subject to RFCT and SC. Equally, any refund of PRT is a taxable receipt for RFCT and SC purposes. RFCT and SC are charged on the same profit base, so neither is allowable as a deduction in calculating the profits chargeable to the other.
[6] For 2025-26 these thresholds were $76.12/bbl for oil and 59p/therm for gas. While the six-month average oil price did fall below the threshold during the financial year, the gas price remained above. As such, the EPL remained in effect.
[7] Oil and gas taxation — Oil and Gas Revenue Levy - GOV.UK
[8] Statistics of government revenues from UK oil and gas production - GOV.UK (www.gov.uk)
{{selectedExpenditureCategoryLabel}} (£{{expenditureScotland[selectedExpenditureCategoryIndex].format(0,3)}}m or {{expenditureSlider[selectedExpenditureCategoryIndex].format(1,3)}} % of £{{expenditureUK[selectedExpenditureCategoryIndex].format(0,3)}}m )
Expenditure Methodology
Approach to estimating expenditure on behalf of the people of Scotland in GERS
Expenditure in GERS is split into two broad types. Total expenditure on services (TES) and total managed expenditure (TME).
- Total expenditure on services represents actual spending undertaken by the public sector.
- Total managed expenditure, which is the primary measure of spending used in the Public Sector Finances, includes a number of accounting adjustments. Accounting adjustments are normally non-cash items included as both revenue and expenditure which do not affect the net fiscal balance. These include capital consumption (similar to depreciation) and VAT refunds.
The sections below describe how TES is estimated for Scotland. The approach to estimating Scottish TES depends on the body which is undertaking the spending.
Scottish Government Spending
Data are provided by the Scottish Government Directorate for Financial Management. This includes the spending of Scottish Government funded public corporations, which include Scottish Water, Caledonian Maritime Assets Ltd, and Forest Enterprise Scotland.
Scottish local government spending
Data are from HM Treasury’s Public Expenditure Statistical Analyses (PESA) publication.[1] Local government spending includes spending on council-owned housing stock, which under the Housing (Scotland) Act 1987 local authorities in Scotland are required to account for separately in a Housing Revenue Account (HRA). In the public sector finances, the HRA is classed as a public corporation. [1] https://www.gov.uk/government/collections/public-expenditure-statistical-analyses-pesa
Other UK government spending
Other government includes all parts of the public sector not funded by the Scottish Government or Scottish local authorities. This includes spending by:
- UK government departments, such as social security spending by the Department for Work and Pensions, defence spending by the Ministry of Defence, and debt interest expenditure by HM Treasury;
- UK government bodies, such as Network Rail and the security and intelligence agencies;
- UK public corporations, including the Bank of England;
- Local government in England, Wales, and Northern Ireland.
Data for the years 2021-22 to 2024-25 are consistent with HM Treasury’s latest Country and Regional Analysis (CRA) publication. Data prior to 2021-22 are based on previous CRA publications.
Data for 2025-26 are estimated based on a number of sources outlined below.
Scottish Government spending estimates
Scottish Government expenditure in GERS is provided by the Scottish Government Directorate for Financial Management, as reported on the UK Government’s public spending system, OSCAR. Data for 2025-26 are provisional final outturn, whilst earlier years are audited final outturn. Data from OSCAR are available at:
https://www.gov.uk/government/collections/hmt-oscar-publishing-from-the-database
Local government spending estimates
Estimates of Scottish local government spending are taken directly from PESA. Current expenditure is taken from Table 7.5. The spending estimates in PESA are consistent with the local authority spending figures published in Scottish Local Government Financial Statistics.[1] GERS uses the figures from PESA as it converts the Scottish figures from SeRCOP categories[2] used by local authorities to the UN COFOG categories used in GERS. A reconciliation between the GERS figures and those published in Scottish Local Government Financial Statistics is included in web tables Table A.10.
[1] http://www.gov.scot/Topics/Statistics/Browse/Local-Government-Finance/PubScottishLGFStats
[2] Service Reporting Code Of Practice 2024/25 | CIPFA
Other UK government spending
Spending for other UK government bodies comes from a variety of sources.
Spending on defence, public sector debt interest, and international services, which Scotland is allocated a population share of in GERS, is taken directly from PESA.
Spending by other UK government bodies on other functions for 2024-25 and earlier are based on the Country and Regional Analysis (CRA) database, published by HM Treasury.[1] In the CRA, UK Government departments and devolved administrations allocate their expenditure programmes to Scotland, Wales, Northern Ireland and the English regions.
The CRA uses the total expenditure on services (TES) spending concept to analyse public expenditure by function. Total expenditure on services covers around 90% of total managed expenditure (TME), which is the aggregate measure of public expenditure used in the UK national accounts. Accounting adjustments are used to move from the TES measure to the TME measure.
The CRA separates total public spending into two components:
- Identifiable expenditure: that is expenditure that can be clearly allocated to a country or region in terms of having been spent for the benefit of that country or region; and
- Non-identifiable expenditure: that is expenditure that cannot be identified as benefiting a particular country or region of the UK but is instead incurred on behalf of the UK as a whole.
In GERS, the methodology to apportion non-identifiable expenditure and identifiable expenditure which occurs outside the UK to Scotland varies according to the particular expenditure estimated. The methodologies used are listed in Table 1. Each reflects the approach that is thought to capture most appropriately the ‘who benefits’ principle.
Table 1: Apportionment Methodologies for Non-Identifiable Expenditure1
| Non-Identifiable UK Expenditure | Outside the UK | |
| General public services | ||
| Public and common services | Population | Population |
| International services | Population | Population |
| Public sector debt interest | Population | n/a |
| Defence | Population | n/a |
| Public order and safety | Population | n/a |
| Economic affairs | ||
| Enterprise and econonomic development | Population | Population |
| Science and technology | GVA | Population |
| Employment policies | n/a | Population |
| Agriculture, forestry and fisheries | n/a | Population |
| Transport | GVA | Population |
| Environment protection2 | GVA & Population | Population |
| Housing and community amenities | n/a | n/a |
| Health | n/a | Population |
| Recreation, culture and religion | Population | Population |
| Education and training | n/a | Population |
| Social protection | Population | Population |
| EU transactions | Population | Population, GNI, & VAT |
| Accounting adjustments – PSF adjustment | n/a | Various (see section below) |
| 1: Where there is no UK non-identifiable expenditure this is entered as not applicable (n/a). 2: All environment protection expenditure is apportioned on a GVA basis, except UKAEA and BNF expenditure on nuclear decommissioning, which is apportioned on a per capita basis. |
[1] https://www.gov.uk/government/collections/country-and-regional-analysis
Other UK Government department spending for Scotland (2025-26)
In 2025-26, there are no CRA data currently available to estimate Scottish spending. The estimate of spending for Scotland by other UK government departments in 2025-26 is produced by taking a share of each department’s 2024-25 spending by function.
The share of each department’s functional spending is shown in Tables 4 and 5. In general, these shares are based on the shares of each department’s spending apportioned to Scotland in GERS 2024-25.
For social protection, spending by the Department for Work and Pensions and HMRC is estimated directly, rather than being based on the GERS 2024-25 share. Spending by the Department for Work and Pensions is based on in-year reported data for Scotland for the first three-quarters of 2025-26[1] and UK spending data for the whole year.[2] Spending by HMRC is based on HMRC spending data[3] and HMRC geographical award statistics.[4]
Tables 4 and 5 below reflect these additional costs in Scotland’s share of each department’s expenditure by function, for current and capital spend respectively.
Scotland debt is calculated based on up to date PSF information. There is no clear way to apportion UK Government debt and related financial transactions at a sub-UK level. Public sector debt interest: Population (non-identifiable UK expenditure). Interest paid by public sector pension funds are apportioned to regions using expenditure data available from the local government pension schemes (LGPS) in the different countries.
[1] https://www.gov.uk/guidance/dwp-benefit-statistics-dissemination-tools
[2] https://www.gov.uk/government/collections/benefit-expenditure-tables
[3] https://www.gov.uk/government/collections/hm-revenue-customs-receipts
Table 4 Share of UK 2025-26 capital expenditure on services by department and function (per cent)
Table 5 Share of Uk 2025-26 current expenditure on services by department and function
Total Managed Expenditure & Accounting Adjustments
The above has described the methodology for deriving total expenditure on services for Scotland. The primary measure of spending used in the public sector finances is total managed expenditure. In order to present total spending for Scotland on this basis, a number of accounting adjustments are included. These are primarily symmetric with adjustments made to revenue data, and so do not necessarily affect the fiscal balances. The accounting adjustments for Scotland are shown in the table below.
Table 6: Expenditure Adjustments: Scotland (£ million)
1 The Housing Revenue Account (HRA) is classified as a public corporation by the ONS, which means that they pay dividends on their profits to local authorities. To ensure that these dividends are non-negative, the ONS imputes a subsidy from local authorities to HRAs to cover any shortfall (offset in public corporation gross operating surplus, which scores on the revenue side of the account).
2 Renewable Obligation Certificates are bought and sold by energy companies. The ONS has decided that these flows should be channelled through central government and so impute offsetting amounts of spending and income.
EU transactions and European Union Budget contributions
While a member of the European Union (EU), the UK contributed to the EU budget and received funding from the EU via a number of programmes. Although the UK left the EU on 31 January 2020, it continued to make payments to, and receive funding from, the EU in 2020-21 under transitional arrangements. These transactions largely ended in 2021-22.
Details of how the ongoing EU Transactions are calculated are provided in GERS 2022-23 methodology documents: Government Expenditure and Revenue Scotland (GERS): detailed methodology 2022-23 - gov.scot (www.gov.scot)
- The {{x.category}} item {{x.name}} was {{x.change}}d from £{{x.old.format(0, 3)}}m to £{{x.new.format(0, 3)}}m. This is a {{x.percentage}}% {{x.change}}