If you live or work in Scotland then you may need to pay tax on your earnings using the Scottish Income Tax rates.

Do I need to pay Scottish Income Tax?

You’ll normally only pay the Scottish rate of Income Tax if your main home is in Scotland. This is normally the place where you spend most of your time, but it could also be where most of your possessions are, or where your family live.

What happens if I move?

You might need to pay Scottish Income Tax if you move to or from Scotland during the tax year, but this is where you spend the majority of the year.
 

What are the Scottish tax rates and thresholds?

Taxpayers in Scotland pay Income Tax at a different rate, and on the basis of different thresholds, to taxpayers in England, Wales, and Northern Ireland. Some rates and thresholds of Scottish Income Tax changed for the 2024/25 tax year and again for 2025/26.
 

How much tax will I pay as a Scottish taxpayer?

If your earnings go above a particular tax threshold, it doesn’t mean that you’ll pay that rate of tax on all of your earnings. You only pay that rate of tax on the part of your income that falls into that particular tax band.

Does Scotland use a different rate of National Insurance?

No, any National Insurance contributions you make will be at the same rate as in the rest of the UK – only the Income Tax rates are different.

Will I pay a different rate of Dividend Tax?

No, the Dividend Tax rate is the same in Scotland as in other parts of the UK. Just be aware that you’ll need to work out the tax you owe on dividends using the UK tax rates and thresholds.

What if I travel for work?

If you have a home elsewhere in the UK but regularly travel for work or have another home in Scotland, you’ll need to work out which one is classed as your main home.

How do I pay it?

If you work for an employer, they’ll use your tax code to make sure they deduct tax at the correct rate. Your tax code will start with an ‘S’, which tells them to use the Scottish rate. For instance, the tax code S1257L tells your employer to deduct tax using Scottish Income Tax rates, and that you have a Personal Allowance of £12,570.

If you submit a Self Assessment tax return, there’s space for you to tell HMRC that you need to pay Income Tax using the Scottish rates. You’ll still be entitled to the same tax allowances as any other taxpayer elsewhere in the UK.

 
Tax is an incredibly complex subject, so it’s easy to get confused. Learn more about our online accountancy services and call 020 3355 4047, or get an instant online quote.