Scottish Income Tax 2025/26: How It Differs From England
Scotland has 6 income tax bands including the unique Starter and Intermediate rates. See exactly how Scottish income tax compares to England, Wales and Northern Ireland.
How Scottish Income Tax Works
Scottish residents pay Income Tax at different rates and bands to those in England, Wales, and Northern Ireland. The Scottish Parliament has had the power to set its own income tax rates and thresholds (for non-savings, non-dividend income) since 2017. This means if you live in Scotland, your payslip will show Scottish income tax rates — even if your employer is based elsewhere in the UK.
Your tax residency is determined by where you live, not where you work. HMRC identifies Scottish taxpayers using an 'S' prefix on their tax code (e.g. S1257L instead of 1257L).
Scottish Income Tax Rates 2025/26
| Band | Taxable Income | Rate |
|---|---|---|
| Personal Allowance | Up to £12,570 | 0% |
| Starter Rate | £12,571 – £15,397 | 19% |
| Basic Rate | £15,398 – £27,491 | 20% |
| Intermediate Rate | £27,492 – £43,662 | 21% |
| Higher Rate | £43,663 – £75,000 | 42% |
| Advanced Rate | £75,001 – £125,140 | 45% |
| Top Rate | Over £125,140 | 48% |
Scotland vs Rest of UK: Key Differences
Scotland has six Income Tax bands compared to three in England, Wales, and Northern Ireland. The most significant differences for earners at various levels are:
- Lower earners (£12,571–£15,397): Pay 19% in Scotland (Starter Rate) vs 20% in England — a small saving of up to £27 per year.
- Middle earners (£27,492–£43,662): Pay 21% Intermediate Rate in Scotland vs 20% in England — costing Scottish taxpayers up to £336 more per year.
- Higher earners (£43,663–£50,270): Scotland's 42% Higher Rate kicks in much earlier than England's 40% Higher Rate (which doesn't start until £50,271). This is a significant divergence worth up to £1,443 extra tax per year.
- Very high earners (£75,001–£125,140): Scotland's 45% Advanced Rate applies, compared to England's 40%. The gap widens considerably.
- Top earners (over £125,140): Scotland's 48% Top Rate vs England's 45% Additional Rate — a 3 percentage point difference.
National Insurance in Scotland
National Insurance is a reserved matter — it is set by the UK Parliament and is the same across all of the UK. Scottish residents pay exactly the same NI contributions as those in England. Only Income Tax rates differ.
What About Savings and Dividend Income?
Scottish Income Tax rates only apply to non-savings, non-dividend income (primarily employment income, self-employment profits, and rental income). Savings interest and dividend income are taxed at UK-wide rates — the Scottish rates do not apply to these income types regardless of where you live.
Scottish Rate of Income Tax and Your Tax Code
If HMRC identifies you as a Scottish taxpayer, your tax code will carry an 'S' prefix. Your employer uses this code to deduct the correct Scottish rates through PAYE. If you move to or from Scotland, you should inform HMRC so they can update your code — it does not update automatically.
Use our Scotland Income Tax Calculator to compare your take-home pay →