Scottish Income Tax 2025-2026: Complete Guide
Everything you need to know about Scotland's unique six-band income tax system, how it compares to the rest of the UK, and what it means for your take-home pay.
Since April 2017, Scotland has had the power to set its own income tax rates and bands, making the Scottish tax system distinctly different from England, Wales, and Northern Ireland. The Scottish Parliament has used these powers to create a more progressive six-band system, with lower earners generally paying less and higher earners paying more than their counterparts in the rest of the UK.
If you're a Scottish resident, understanding how the Scottish system works is essential for calculating your take-home pay and making financial decisions. This guide explains the six Scottish tax bands, compares them with the rest of the UK, and helps you understand whether you're better or worse off under the Scottish system.
Key Differences
- • 6 tax bands (vs 4 in rest of UK)
- • Lower earners pay slightly less
- • Higher earners pay more
- • Top rate of 48% (vs 45%)
- • S prefix on tax codes
- • Same personal allowance (£12,570)
The Six Bands
- • Personal Allowance: 0% up to £12,570
- • Starter Rate: 19% (£12,571-£14,876)
- • Basic Rate: 20% (£14,877-£26,561)
- • Intermediate: 21% (£26,562-£43,662)
- • Higher Rate: 42% (£43,663-£75,000)
- • Advanced: 45% (£75,001-£125,140)
- • Top Rate: 48% (above £125,140)
The Six Scottish Tax Bands Explained
Scotland's six-band system is designed to be more progressive than the rest of the UK's four-band system. Here's a detailed breakdown of each band:
| Band Name | Income Range | Scottish Rate | rUK Rate | Difference |
|---|---|---|---|---|
| Personal Allowance | £0 - £12,570 | 0% | 0% | Same |
| Starter Rate | £12,571 - £14,876 | 19% | 20% | -1% |
| Basic Rate | £14,877 - £26,561 | 20% | 40% | -20% |
| Intermediate Rate | £26,562 - £43,662 | 21% | 45% | -24% |
| Higher Rate | £43,663 - £75,000 | 42% | 45% | -3% |
| Advanced Rate | £75,001 - £125,140 | 45% | 45% | Same |
| Top Rate | £125,140 - No limit | 48% | 45% | +3% |
19%Starter Rate (£12,571-£14,876)
This is unique to Scotland and gives a 1% discount compared to the rest of the UK's 20% basic rate. This £2,306 band saves Scottish taxpayers up to £23.06 per year compared to the rest of the UK.
20%Basic Rate (£14,877-£26,561)
The Scottish basic rate matches the rest of the UK at 20%, but the band is much narrower (£11,685 vs £37,700 in rUK). This means Scottish taxpayers enter higher tax bands much sooner.
21%Intermediate Rate (£26,562-£43,662)
Another Scotland-only band, charging 21% - just 1% more than the basic rate but 19% less than the rUK higher rate. This band significantly affects middle earners.
42%Higher Rate (£43,663-£75,000)
Scotland's higher rate starts much earlier than rUK (£43,663 vs £50,270) and charges 2% more (42% vs 40%). This is where Scottish taxpayers start paying significantly more.
45%Advanced Rate (£75,001-£125,140)
This band matches the rUK additional rate of 45%, but kicks in much earlier (£75,001 vs £125,140). High earners in Scotland pay this rate on a much larger portion of their income.
48%Top Rate (Above £125,140)
Scotland's top rate is 48%, three percentage points higher than the rUK's 45% additional rate. This is the highest income tax rate in the UK.
Scotland vs Rest of UK: Who Pays More?
Whether you pay more or less tax in Scotland depends entirely on your income level. Here's a detailed comparison across different salary levels:
| Annual Salary | Scotland Tax | rUK Tax | Difference | Winner |
|---|---|---|---|---|
| £15,000 | £463 | £486 | -£23 | Scotland |
| £20,000 | £1,413 | £1,486 | -£73 | Scotland |
| £25,000 | £2,413 | £2,486 | -£73 | Scotland |
| £30,000 | £3,463 | £3,486 | -£23 | Scotland |
| £35,000 | £4,634 | £4,486 | +£148 | rUK |
| £40,000 | £5,684 | £5,486 | +£198 | rUK |
| £50,000 | £9,549 | £7,486 | +£2063 | rUK |
| £60,000 | £13,749 | £11,432 | +£2317 | rUK |
| £75,000 | £20,049 | £17,432 | +£2617 | rUK |
| £100,000 | £31,549 | £27,432 | +£4117 | rUK |
| £150,000 | £56,349 | £49,932 | +£6417 | rUK |
Note: These calculations assume full personal allowance and no other deductions. Negative difference means Scotland pays less.
Scotland is better
Thanks to the 19% starter rate, lower earners in Scotland save a small amount. On £25,000, you save about £73 per year.
Roughly similar
The 21% intermediate rate means you pay slightly more than rUK, but the difference is small. On £40,000, you pay about £198 more per year.
Scotland is more expensive
Higher earners pay significantly more. On £100,000, you pay £4,117 more per year. On £150,000, it's £6,417 more.
The Crossover Point
The "crossover point" where Scottish taxpayers start paying more than rUK is around £28,000. Below this, Scotland is marginally cheaper. Above this, Scotland becomes progressively more expensive.
This is because the saving from the 19% starter rate (maximum £23) is outweighed by the 21% intermediate rate kicking in much earlier than the rUK's 40% higher rate.
Am I a Scottish Taxpayer?
You're a Scottish taxpayer if Scotland is your main place of residence. This is based on where you live, not where you work or where your employer is based.
You're a Scottish taxpayer if:
- • Scotland is where you have your main home
- • You spend most of your time in Scotland (more days than in other parts of the UK)
- • Your family home is in Scotland (even if you work away during the week)
- • You have close personal and economic ties to Scotland
It doesn't matter:
- • Where your employer is based
- • Where you actually work (you could work in England but live in Scotland)
- • Whether you were born in Scotland
- • What nationality you are
The S Tax Code
If you're a Scottish taxpayer, your tax code will have an 'S' prefix. For example: S1257L instead of just 1257L. This tells your employer to use Scottish tax rates when calculating your PAYE.
What if I move to or from Scotland?
If you move during the tax year, you'll be assessed as a Scottish taxpayer for the full year if you're resident in Scotland on the "Scottish date" (usually the last day of the tax year, 5 April). However, if you move part-way through the year, HMRC may split your residency and apply different rates for different parts of the year.
You should inform HMRC when you move to ensure your tax code is updated correctly.
Real-World Examples
Let's look at some detailed examples to see exactly how the Scottish system affects different earners:
Example 1: £20,000 Salary (Part-time/Entry Level)
Example 2: £40,000 Salary (Median Full-time)
Example 3: £75,000 Salary (Higher Earner)
Pros and Cons of the Scottish System
- ✓More progressive: Lower earners pay less, higher earners pay more, reducing inequality
- ✓Starter rate benefit: All taxpayers benefit from the 19% starter rate on the first £2,306
- ✓Intermediate rate cushion: 21% intermediate rate softens the jump to higher rate tax
- ✓Generates more revenue: Additional revenue funds Scottish public services
- ✓Democratic control: Scottish Parliament can adjust rates to match Scotland's priorities
- ✗Higher earners pay more: Those earning £50k+ pay significantly more than rUK counterparts
- ✗Complexity: Six bands are more complex than four, making tax planning harder
- ✗Early higher rate: Middle earners hit higher rates earlier (£43,663 vs £50,270)
- ✗Potential brain drain: Concern that high earners might relocate to rUK
- ✗Payroll complexity: Employers must handle different systems for Scottish and rUK employees
Calculate Your Scottish Tax
Use our free salary calculator to see exactly how much income tax you'll pay under the Scottish system for 2025-2026, plus National Insurance, student loans, and pension deductions.
Calculate Your Take-Home PayFrequently Asked Questions
No. National Insurance is set at UK level and is the same whether you live in Scotland, England, Wales, or Northern Ireland. Only income tax rates differ in Scotland.
You pay Scottish income tax. It's based on where you live (your residence), not where you work. Your employer will use your S tax code to deduct the correct Scottish rates through PAYE, regardless of where your workplace is located.
No. If you're a Scottish resident, you must pay Scottish income tax rates. The only way to pay rUK rates is to not be a Scottish resident - i.e., to move your main residence to England, Wales, or Northern Ireland.
No. Scottish income tax rates only apply to non-savings, non-dividend income (basically employment and self-employment income, pensions, and rental income). Savings interest and dividends are taxed at UK rates for everyone.
Possibly. The Scottish Parliament sets income tax rates and bands annually in its budget. Rates have been adjusted several times since devolution in 2017. Check the Scottish Government's budget announcements each year for any changes affecting the upcoming tax year.