With SD1, every pound from this job or pension is taxed at Scotland's higher rate, 42% in 2026-27, with no Personal Allowance. HMRC uses it when your main job already uses up your allowance and the Scottish bands below the higher rate, so this extra income sits in the 42% band.
SD1 is not the same as SBR. SBR taxes the second income at 20% (basic rate); SD1 at 42%. On £10,000 of extra pay the difference is £2,200 a year, so check which one you have.
Scottish bands and the code that matches each one
| Band | Taxable income 2026-27 | Rate | Flat-rate code |
|---|---|---|---|
| Starter | £12,571 to £16,537 | 19% | none |
| Basic | £16,538 to £29,526 | 20% | SBR |
| Intermediate | £29,527 to £43,662 | 21% | SD0 |
| Higher | £43,663 to £75,000 | 42% | SD1 |
| Advanced | £75,001 to £125,140 | 45% | SD2 |
| Top | Over £125,140 | 48% | SD3 |
Code meanings from GOV.UK, what your tax code means. Band limits from GOV.UK, rates and thresholds for employers 2026 to 2027.
Take-home pay on SD1 in 2026-27
| Pay from this job (year) | Income tax at 42% | National Insurance | Take-home |
|---|---|---|---|
| £5,000 | £2,100 | £0 | £2,900 |
| £10,000 | £4,200 | £0 | £5,800 |
| £15,000 | £6,300 | £194 | £8,506 |
| £20,000 | £8,400 | £594 | £11,006 |
| £30,000 | £12,600 | £1,394 | £16,006 |
National Insurance is worked out separately for each job: 8% on the part of this job's pay above £12,570 a year, 2% above £50,270. A small second job below £12,570 pays no National Insurance at all.
Why have you been given SD1?
- Your main salary is above the start of the Scottish higher rate band (£43,663 in 2026-27), so any extra job is taxed at 42%.
- You draw a pension alongside a salary that already reaches the higher rate band.
If your main pay is lower than that, SD1 may be wrong: HMRC may expect income that you no longer receive. Check your personal tax account and ask HMRC to review the code.
Frequently asked questions
What does SD1 tax code mean?
All income from this job or pension is taxed at the Scottish higher rate, 42% in 2026-27, with no tax-free allowance.
Is SD1 the same as SBR?
No. SBR applies 20% and SD1 applies 42%. SD0 applies 21%, SD2 45% and SD3 48%.
SD1 is on my only job. What should I do?
Contact HMRC through your personal tax account or on 0300 200 3300. With one job you would normally have S1257L, which gives the £12,570 Personal Allowance.
Does SD1 change my National Insurance?
No. National Insurance does not depend on the tax code. Each job is assessed on its own pay.