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

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.

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.
 

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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 2023/24 tax year, and will change again in 2024/25. This includes the introduction of a new ‘Advanced rate’ tax band.
 

Tax Rate 2023/24
Tax Band Thresholds
2024/25
Tax Band Thresholds
Personal allowance: No tax on this income. £0 – £12,570 £0 – £12,570
Starter rate £12,571 – £14,732
19% tax
£12,571 – £14,876
19% tax
Basic rate £14,733 – £25,688
20% tax
£14,877 – £26,561
20% tax
Intermediate rate £25,689 – £43,662
21% tax
£26,562 – £43,662
21% tax
Higher rate £43,663 – £125,140
42% tax
£43,663 – £75,000
42% tax
Advanced rate
Not in use
£75,001 – £125,140
45% tax
Top rate Over £125,140
47% tax
Over £125,140
48% tax

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.

For example

Let’s use the example of someone who lives in Scotland, and earns an income of £100,000 in the 2024/25 tax year. This could be from a salary, self-employment, or a combination of the two.

  • 0% tax on the first £12,570
  • 19% on the proportion of your income subject to the starter rate (which covers £12,571 – £14,876)
  • 20% basic rate tax on the part of your income which falls into the next tax bracket (£14,877 – £26,561)
  • 21% tax on the part of your salary which falls into the intermediate tax band (which is £26,562 – £43,662)
  • 42% higher rate income tax on the next chunk (from £43,663 up to £75,000)
  • 45% advanced tax on income above £75,000 up your total salary of £100,000

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.

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.

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.

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.

About The Author

Elizabeth Hughes

A content writer specialising in business, finance, software, and beyond. I'm a wordsmith with a penchant for puns and making complex subjects accessible. Learn more about Elizabeth.

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