Scottish vs English
Income Tax 2026/27
Last reviewed: April 2026
Scotland has six income tax bands compared to three in England and Wales. For most salaries above £30,000, Scottish taxpayers pay more income tax. This guide shows you exactly how much, with worked examples at four salary levels.
Why Scotland has different income tax rates
The Scotland Act 2016 gave the Scottish Parliament the power to set its own income tax rates and bands for Scottish taxpayers. Since 2017/18, Scotland has diverged progressively from the rest of the UK — creating more bands at the lower end and raising rates at the higher end.
Crucially, the Scottish Parliament only controls rates on non-savings, non-dividend income. This covers employment income, self-employment profits, pension income and rental income. Savings interest and dividends are still taxed using UK-wide rates, even for Scottish residents.
The personal allowance (£12,570 in 2026/27) is set by Westminster and applies identically in Scotland and the rest of the UK. Both Scottish and English taxpayers pay no income tax on the first £12,570 of income.
2026/27 income tax rates: Scotland vs England & Wales
🏴 Scotland
| Band | Rate | Range |
|---|---|---|
| Starter rate | 19% | £12,571 – £15,397 |
| Basic rate | 20% | £15,398 – £24,487 |
| Intermediate rate | 21% | £24,488 – £43,662 |
| Higher rate | 42% | £43,663 – £75,000 |
| Advanced rate | 45% | £75,001 – £125,140 |
| Top rate | 48% | £125,141 – No limit |
🏴 England & Wales
| Band | Rate | Range |
|---|---|---|
| Basic rate | 20% | £12,571 – £50,270 |
| Higher rate | 40% | £50,271 – £125,140 |
| Additional rate | 45% | £125,141 – No limit |
Worked examples — how much extra does Scotland cost?
All figures below are for income tax only on employment income. National Insurance contributions are identical in Scotland and England. Personal allowance of £12,570 applied throughout. Positive differences mean Scotland pays more.
🏴 Scotland
£3,513
🏴 England
£3,486
Small difference — Scottish starter rate slightly offsets the same basic rate.
🏴 Scotland
£6,944
🏴 England
£6,486
Intermediate rate at 21% vs England's flat 20% starts to bite.
🏴 Scotland
£13,244
🏴 England
£11,432
Scottish higher rate of 42% vs English 40% creates a significant gap.
🏴 Scotland
£21,794
🏴 England
£19,432
Scotland's 45% advanced rate (from £75k) vs England's 40% widens the gap further.
All calculations use 2026/27 rates and thresholds. Use our compare salaries tool to enter your own salary and pension contributions for a personalised breakdown.
The S tax code — what it means and when it applies
If you are a Scottish taxpayer, your tax code will have an S prefix. For example, the most common code is S1257L — the Scottish equivalent of the standard 1257L code used in England and Wales.
The S prefix is important because it tells your employer's payroll software to use Scottish rates rather than UK-wide rates. If you are on a Scottish income but your code does not have an S prefix, your employer will deduct too little tax, and HMRC will eventually issue a tax demand for the shortfall.
Common S-prefix codes
S1257L— standard code for Scottish taxpayersSBR— emergency: basic rate on all earnings, no personal allowanceSD0— emergency: intermediate rate on all earningsSD1— emergency: higher rate on all earningsSD2— emergency: advanced rate on all earnings
HMRC automatically issues the S-prefix version of your code when you register your address in Scotland. If you have recently moved to or from Scotland, check your latest payslip and contact HMRC or update your address via your Personal Tax Account if the code has not been updated.
Cross-border workers: where you live, not where you work
A common misconception is that you pay Scottish rates if your employer is based in Scotland. That is not correct. Your income tax residency is determined by where your main home is, not where your employer is located or where you physically work.
Live in Edinburgh, work in Newcastle
Scottish taxpayer — S tax code applies, Scottish rates deducted
Live in Carlisle, work in Glasgow
English taxpayer — standard tax code, English rates deducted
Live in Scotland, work remotely for a London company
Scottish taxpayer — S code should apply; check your code
If you split your time between Scotland and the rest of the UK, you are a Scottish taxpayer if Scotland is your main place of residence — typically where you spend the majority of the year. HMRC guidance on Scottish taxpayer status is published at gov.uk/scottish-income-tax.
Frequently asked questions
Who counts as a Scottish taxpayer?
You are a Scottish taxpayer if your main home is in Scotland for more than half of the tax year. It is where you live — not where you work — that determines your tax residency. If you live in Edinburgh but commute to an office in Newcastle, you are still a Scottish taxpayer and your employer should use an S-prefix tax code.
What is an S tax code and will I know if I have one?
An S tax code means HMRC has told your employer to deduct Scottish income tax rates. For example, S1257L is the Scottish equivalent of the standard 1257L code. You can see your current tax code on your payslip or P60. If you have moved to or from Scotland, check your code and contact HMRC if it has not been updated.
Do Scotland's higher income tax rates apply to savings and dividends?
No. The Scottish Parliament only sets rates for non-savings, non-dividend income — essentially employment income, self-employment profits and rental income. Savings interest and dividends are taxed using UK-wide rates for all taxpayers, including those in Scotland.
I earn £45,000 in Scotland — am I better or worse off than in England?
At £45,000 you pay more income tax in Scotland. In 2026/27 a Scottish taxpayer earning £45,000 pays approximately £6,944 in income tax compared to £6,486 for an equivalent English taxpayer — a difference of roughly £458 per year (about £38 per month). The gap widens significantly at higher salaries.
Sources
See your exact take-home pay in Scotland vs England
Enter your salary and select Scotland or England in our calculator to see a full income tax breakdown using live 2026/27 rates.