Scottish Income Tax: A Different System
Since 2017, the Scottish Parliament has had the power to set its own income tax rates and bands, separate from those in England, Wales, and Northern Ireland. Scotland has opted for a more progressive structure with six tax bands compared to the three bands used in the rest of the UK. This means that lower earners in Scotland pay slightly less income tax than their counterparts elsewhere in the UK, while higher earners pay more. The rates range from a starter rate of 19% to a top rate of 48%.
The Six Scottish Tax Bands Explained
The starter rate of 19% applies to the first £2,307 of taxable income above the personal allowance. The Scottish basic rate of 20% covers income from £14,878 to £26,561, followed by the intermediate rate of 21% from £26,562 to £43,662. The higher rate of 42% applies from £43,663 to £75,000, the advanced rate of 45% covers £75,001 to £125,140, and the top rate of 48% applies to income above £125,140. Note that the personal allowance of £12,570 is set by the UK Government and applies equally to Scottish taxpayers.
Scotland vs Rest of UK: Who Pays More?
The crossover point where Scottish taxpayers begin paying more than those in the rest of the UK is around £28,000 to £30,000 of annual income. Below this level, the starter rate of 19% means Scottish earners pay slightly less. Above this point, the intermediate rate of 21% and the significantly higher rate of 42% (compared to 40% in rUK) mean that Scottish taxpayers pay progressively more. At a salary of £50,000, a Scottish taxpayer pays approximately £200 more per year in income tax than someone in England on the same salary.
National Insurance Remains the Same
It is important to note that National Insurance is not devolved and remains the same across the entire UK. Scottish taxpayers pay the same NI rates as those in England, Wales, and Northern Ireland: 8% on earnings between £12,570 and £50,270, and 2% above that. Similarly, student loan repayment thresholds and rates are UK-wide. The only difference is income tax. For a comparison with rest-of-UK rates, visit our UK tax bands page or use the main UK calculator with the Scotland checkbox enabled.