Since 2017 Scotland has set its own Income Tax rates on earnings. The 2025/26 system has six bands — one more than the rest of the UK — and higher rates at the top end. National Insurance, dividends and savings income remain UK-wide.
Who's a Scottish taxpayer?
Your Scottish tax status is determined by where your "main residence" is on the main tax-paying day of the year. HMRC uses an S-prefix on your tax code (e.g. S1257L) to mark Scottish taxpayers. You can be a Scottish taxpayer even if you work elsewhere in the UK — what matters is where you live.
Scottish Income Tax bands 2025/26
| Band | Income range | Rate |
|---|---|---|
| Personal Allowance | £0 – £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% |
The Advanced rate is Scotland-only — introduced in April 2024 between the old higher and top rates. The top rate at £125,140+ is 48% (vs 45% in England).
Where Scotland is cheaper vs more expensive
Due to the Starter and Intermediate rates, lower earners in Scotland pay slightly less tax. The crossover is around £27,850 — above that, Scotland is progressively more expensive, and the gap grows past the higher-rate threshold.
NI + savings + dividends stay UK-wide
Scottish rates apply only to non-savings non-dividend income. National Insurance is administered by HMRC at UK rates (8% main / 2% above £50,270). Dividend tax uses UK rates (8.75% / 33.75% / 39.35%). Savings interest above the Personal Savings Allowance follows UK main-band rates.
Pension contributions + Gift Aid relief
If you make pension contributions or Gift-Aid charitable donations, you get relief at your highest Scottish marginal rate automatically. That's a genuine advantage at the Higher/Advanced/Top bands — e.g. a Higher-rate Scottish taxpayer effectively gets 42% relief on pension contributions vs 40% for a rest-of-UK equivalent.