Scottish taxpayers pay Income Tax on wages, pensions and most other taxable income at rates and bands set by the Scottish Parliament: for 2026 to 2027 there are six rates above the Personal Allowance, from 19% to 48%. Savings interest and dividends are still taxed at UK rates, and the tax is collected by HMRC through PAYE codes starting with S or through Self Assessment.
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What are the Scottish rates and bands for 2026 to 2027?
The table shows the bands for someone with the standard Personal Allowance of £12,570.
| Band | Taxable income | Rate |
|---|---|---|
| Personal Allowance | Up to £12,570 | 0% |
| Starter rate | £12,571 to £16,537 | 19% |
| Basic rate | £16,538 to £29,526 | 20% |
| Intermediate rate | £29,527 to £43,662 | 21% |
| Higher rate | £43,663 to £75,000 | 42% |
| Advanced rate | £75,001 to £125,140 | 45% |
| Top rate | Over £125,140 | 48% |
HMRC’s rates table expresses the same bands as income after allowances: starter rate up to £3,967, basic rate £3,968 to £16,956, intermediate rate £16,957 to £31,092, higher rate £31,093 to £62,430, advanced rate £62,431 to £125,140 and top rate above that.
What changed from 2025 to 2026?
The rates are the same. The starter and basic rate bands were widened (the basic rate previously began at £15,398 and the intermediate rate at £27,492), while the higher rate threshold stays at £43,663 and the advanced rate still begins at £75,001.
Who counts as a Scottish taxpayer?
The definition is in section 80D of the Scotland Act 1998. You must be UK resident for Income Tax, and meet one of three conditions for the tax year:
- Condition A: you have a close connection with Scotland, which in practice means your main home is there.
- Condition B: you have no close connection with England, Wales or Northern Ireland, and you spend more days of the year in Scotland than in any other part of the UK.
- Condition C: at any time in the year you are an MP for a Scottish constituency or a member of the Scottish Parliament.
Status applies to the whole tax year. Your main home is usually where you live and spend most of your time, whether you own it, rent it or live there for free. It can be the home where you spend less time if that is where your possessions are, where your spouse or civil partner and family live, and where you are registered with a bank, GP or car insurer. For people with no clear main home, such as some mobile workers or students, HMRC counts days, with a day spent where you are at midnight.
Moving to or from Scotland
If you move to Scotland and live there for longer than anywhere else in the UK during the tax year, you are a Scottish taxpayer for that year. You must tell HMRC your new address, otherwise tax may be deducted at the wrong rate. When HMRC changes your status, the change is backdated to 6 April and your pay or pension deductions are adjusted across the year.
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Who sets the rates, and what is outside them?
Section 80C of the Scotland Act 1998 lets the Scottish Parliament pass a Scottish rate resolution. Each resolution covers one tax year, must be made before that year starts and not more than 12 months before, and each rate must be a whole or half number. Only a member of the Scottish Government can move the motion. Section 80C(2B) also allows different rates for property income, but not different rates for different types of other income.
Some things stay UK wide:
- The Personal Allowance of £12,570 and its withdrawal above £100,000 of adjusted net income, so no allowance is due from £125,140; see Personal Allowance tapering.
- Savings interest and dividends, which are taxed at the same rates as in the rest of the UK. See dividend allowance and tax rates.
- The Personal Savings Allowance band test. Section 12B(8) of the Income Tax Act 2007 decides whether a Scottish taxpayer gets £1,000 or £500 by reference to UK rates, explained in tax on savings interest.
How much more does a Scottish taxpayer pay?
Illustration only. These figures apply the 2026 to 2027 bands to salaries chosen for the example, with the standard Personal Allowance and no other income.
| Salary | Scottish Income Tax | Income Tax elsewhere in the UK | Difference |
|---|---|---|---|
| £40,000 | £5,551.07 | £5,486.00 | £65.07 |
| £50,000 | £8,982.05 | £7,486.00 | £1,496.05 |
For the £40,000 salary, taxable income is £27,430: £3,967 at 19% (£753.73), £12,989 at 20% (£2,597.80) and £10,474 at 21% (£2,199.54). At £50,000, taxable income of £37,430 reaches the Scottish higher rate band: the intermediate band is used in full (£14,136 at 21%, £2,968.56) and £6,338 is taxed at 42% (£2,661.96). The gap widens sharply between £43,663 and £50,270, where Scottish taxpayers pay 42% but taxpayers elsewhere still pay 20%.
How do pension contributions and Marriage Allowance work in Scotland?
Pension tax relief
Under relief at source, pension providers claim 20% relief for everyone. A Scottish taxpayer on the 19% starter rate still receives 20% and does not have to pay back the difference. Those paying more than 20% can claim extra relief through Self Assessment:
- 1% on contributions up to the amount of income taxed at 21%
- 22% up to the amount taxed at 42%
- 25% up to the amount taxed at 45%
- 28% up to the amount taxed at 48%
Business owners can read more in pension contributions and tax relief for business owners.
Marriage Allowance
A Scottish recipient can receive Marriage Allowance while paying the starter, basic or intermediate rate, which usually means income from £12,571 to £43,662. Once they reach the Scottish higher rate they are no longer eligible, even though someone elsewhere in the UK on the same income still would be. See Marriage Allowance explained.
How is Scottish Income Tax collected?
Employees and pensioners have a tax code starting with S, which tells the payroll to use Scottish rates. The standard code is S1257L. Codes used for second jobs and pensions also have Scottish versions: SBR (basic rate), SD0 (intermediate rate), SD1 (higher rate), SD2 (advanced rate) and SD3 (top rate). S0T means the allowance has been used up or the employer lacks the details. More on the structure of codes is in PAYE tax codes explained.
Online Self Assessment returns have a box to tell HMRC you pay Scottish Income Tax. The tax is collected by HMRC and paid to the Scottish Government.
What mistakes do people make?
- Not updating an address after a move. HMRC says you may pay tax at the wrong rate if you do not tell it your new address.
- Assuming days decide status for someone with two homes. The main home test comes first; day counting is for people who cannot identify a main home.
- Applying Scottish rates to dividends or interest. These use UK rates. Directors paid by small salary and dividends feel less of the Scottish difference than employees do.
- Missing extra pension relief. Relief above 20% is not given automatically under relief at source.
- Checking only the rates. The higher rate threshold of £43,663 is what drives the biggest differences for middle earners.
Rates for the rest of the UK are set out in UK tax rates and thresholds for 2026 to 2027.
If HMRC opens a check into your return, tax investigation insurance pays your accountant’s fees. Solar Protect cover pays up to £100,000 with no excess; it never pays tax, interest or penalties. Read how our cover works or get a quote.
Related Accountapedia entries
- What changes when you become a higher rate taxpayer
- Income tax rates and bands for 2026 to 2027
- Scottish taxpayers and pension relief at source
- Welsh rates of income tax
- How dividends are taxed for individuals
- Who is a Scottish taxpayer
- Marginal tax rates for Scottish taxpayers
- Scottish taxpayers: savings and dividends use UK bands
Sources
- GOV.UK: Scottish income tax
- GOV.UK: Income tax rates and allowances current and past
- GOV.UK: Print
- legislation.gov.uk: Act 1998 c. 46, section 80D
- legislation.gov.uk: Act 1998 c. 46, section 80C
- GOV.UK: Income tax rates
- legislation.gov.uk: Act 2007 c. 3, section 12B
- GOV.UK: Print
- GOV.UK: Marriage allowance
- GOV.UK: What your tax code means
Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 8 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.