Scottish Income Tax Explained
Scotland sets its own Income Tax rates and bands. For 2025-26, there are 6 bands ranging from 19% (Starter) to 48% (Top), compared to 3 bands in the rest of the UK.
What is Scottish Income Tax?
Since April 2017, the Scottish Parliament has had the power to set its own Income Tax rates and bands. Scottish taxpayers are identified by an "S" prefix on their tax code (e.g. S1257L). The rates apply to non-savings, non-dividend income only. Savings income, dividend income, the Personal Allowance and National Insurance all remain UK-wide.
How it works
Scottish Income Tax bands for 2025-26: Starter rate 19% (£12,571 to £14,876), Basic rate 20% (£14,877 to £26,561), Intermediate rate 21% (£26,562 to £43,662), Higher rate 42% (£43,663 to £75,000), Advanced rate 45% (£75,001 to £125,140), Top rate 48% (above £125,140). The key differences from England are lower thresholds for the higher rate (£43,662 vs £50,270) and higher rates at the top end.
Real example
Craig earns £50,000 and lives in Edinburgh. His Scottish Income Tax: Starter rate on £2,305: £438. Basic rate on £11,685: £2,337. Intermediate rate on £17,101: £3,591. Higher rate on £6,338: £2,662. Total: £9,028. If Craig lived in England on the same salary, he would pay £7,486. The difference is £1,542 per year, or £129 per month.
Who does this affect?
Anyone who has their main residence in Scotland on 5 April of the preceding tax year. Around 2.7 million Scottish taxpayers are affected. Your employer determines your Scottish status based on your address, and HMRC issues an S-prefix tax code. You do not need to do anything differently to file or pay.
HMRC source
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