SD1 Tax Code: Scottish Basic Rate on Second Income
The tax code SD1 means all income from this source is taxed at Scotland's Basic rate of 20%, with no Personal Allowance applied. It is one of several Scottish flat-rate codes used when a taxpayer's Personal Allowance has already been allocated to a different income source. The S prefix indicates a Scottish taxpayer; D1 indicates the Basic rate band applies to this income.
In practice, SD1 and SBR produce identical take-home pay figures — both tax at 20% flat. The distinction lies in how HMRC codes the income for band allocation purposes.
Scottish income tax bands 2025-26
| Band | Income range | Rate |
|---|---|---|
| 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% |
Take-home pay on SD1
| Gross income (this source) | Income tax (SD1 at 20%) | Take-home (approx) |
|---|---|---|
| £5,000 | £1,000 | £3,774 |
| £10,000 | £2,000 | £7,406 |
| £15,000 | £3,000 | £11,206 |
| £20,000 | £4,000 | £15,406 |
| £25,000 | £5,000 | £19,006 |
| £30,000 | £6,000 | £22,606 |
SD1 vs SBR vs SD0: what is the difference?
Scottish taxpayers with secondary income sources may see three different flat-rate codes:
- SD0 (19% Starter rate): Used when additional income falls into the Starter band. Less common in practice.
- SD1 / SBR (20% Basic rate): Both tax at 20%; effectively interchangeable for take-home purposes. SBR is more commonly seen on second jobs.
- SD2 (21% Intermediate rate): Applied when additional income falls into the Intermediate band (£27,492–£43,662).
- SD3 (42% Higher rate): For additional income in the Higher rate band.
Why have you been given SD1?
HMRC assigns SD1 when:
- You have a second job and your Personal Allowance is used by your primary employer
- You receive a secondary pension alongside employment income
- HMRC has specific information suggesting this income falls in the Basic rate band and wants to distinguish it from SBR coding for administrative purposes
How to check if SD1 is correct
Log into your HMRC Personal Tax Account to see all income sources and their tax codes. If you believe SD1 has been applied to a primary income source in error — or if your combined income means the correct flat rate should be different — contact HMRC on 0300 200 3300.
Frequently asked questions
What does SD1 tax code mean?
SD1 means you are a Scottish taxpayer and this income source is taxed at 20% (Basic rate) with no Personal Allowance. The S = Scotland, D1 indicates the Basic rate band applies.
Is SD1 the same as SBR?
For take-home pay purposes, yes — both result in 20% tax on all income from this source. SBR is more commonly seen on second employment. HMRC may use SD1 in specific band-allocation situations.
How do I fix SD1 on my tax code?
If SD1 appears on your only job (with no other income), contact HMRC — you should have S1257L instead, giving you the standard Personal Allowance. Call 0300 200 3300 or update via your Personal Tax Account.
Does SD1 affect my National Insurance?
No. National Insurance is calculated the same way regardless of your income tax code. NI is deducted at 8% on earnings between £12,570 and £50,270, and 2% above that.