SD0 Tax Code: Scottish Starter Rate — When Does It Apply?
The tax code SD0 is a Scottish flat-rate code that taxes all income from a given source at 19% — Scotland's Starter rate — with no Personal Allowance applied. It is the lowest of Scotland's flat-rate codes and is relatively uncommon. Understanding when it applies requires knowing Scotland's unique six-band income tax structure.
What is Scotland's Starter rate?
Scotland introduced the Starter rate in April 2018 as the lowest taxable band, sitting below the Basic rate. For 2025-26:
- Starter rate: 19% on income between £12,571 and £15,397
- Basic rate: 20% on income between £15,398 and £27,491
- Intermediate rate: 21% on income between £27,492 and £43,662
The Starter band covers only £2,826 of income per year (£15,397 − £12,571). This narrow band means SD0 is typically relevant only for low-income second jobs or very small secondary income sources.
SD0 take-home pay examples
| Gross income (this source) | Tax at 19% (SD0) | Tax at 20% (SD1/SBR) | SD0 saving |
|---|---|---|---|
| £5,000 | £950 | £1,000 | £50 |
| £10,000 | £1,900 | £2,000 | £100 |
| £15,000 | £2,850 | £3,000 | £150 |
| £20,000 | £3,800 | £4,000 | £200 |
The difference between SD0 and SBR/SD1 is 1 percentage point — modest in absolute terms but meaningful for low-income secondary work.
Why does SD0 exist?
Scotland's multi-band structure means HMRC needs separate codes to match the correct rate to secondary income. England has no Starter rate equivalent, so the nearest English code is BR (20%). SD0 exists specifically for Scottish taxpayers whose secondary income falls in the 19% Starter band rather than the 20% Basic band.
When will HMRC give you SD0?
HMRC assigns SD0 when it has specific information that additional income falls into the Starter rate band. In practice this is rare — most second jobs default to SBR — but it may be issued when:
- HMRC has detailed information about your total income levels across sources
- Your combined income from all sources means secondary income genuinely falls in the £12,571–£15,397 band
- You have explicitly requested a specific band code following a tax review
Frequently asked questions
What does SD0 tax code mean?
SD0 means you are a Scottish taxpayer and all income from this source is taxed at 19% (Scotland's Starter rate) with no Personal Allowance. S = Scotland, D0 = Starter rate flat code.
Is SD0 correct for my situation?
SD0 is correct if your secondary income genuinely falls in the Scottish Starter rate band (£12,571–£15,397). If it appears on your only job, contact HMRC — you should have S1257L instead.
How does SD0 compare to SBR?
SD0 taxes at 19%, SBR at 20%. For a £10,000 secondary income, SD0 saves you £100 per year versus SBR. Both codes apply with no Personal Allowance.
Do I pay National Insurance on SD0?
Yes. National Insurance is calculated independently of your income tax code. Under SD0 you pay 8% NI on earnings between £12,570 and £50,270 and 2% above that, exactly as normal.