Last updated: 16 October 2026
Why was there a petition about Scottish tax?
When Scotland introduced a new advanced rate of income tax in April 2024, a petition called for Westminster to take back the Scottish Parliament’s income tax powers. The UK Parliament did not act on it, and Scotland still sets its own rates and bands for non-savings, non-dividend income, such as salaries, pensions, self-employed profits and rental income.
Scottish income tax bands for 2026/27
| Band | Taxable income | Rate |
| Personal allowance | Up to £12,570 | 0% |
| Starter | £12,571 to £16,537 | 19% |
| Basic | £16,538 to £29,526 | 20% |
| Intermediate | £29,527 to £43,662 | 21% |
| Higher | £43,663 to £75,000 | 42% |
| Advanced | £75,001 to £125,140 | 45% |
| Top | Over £125,140 | 48% |
The personal allowance is the same UK-wide and still tapers away between £100,000 and £125,140.
How does Scotland compare with the rest of the UK?
| Salary | Scottish income tax | England, Wales and NI |
| £25,000 | £2,446 | £2,486 |
| £40,000 | £5,551 | £5,486 |
| £60,000 | £13,182 | £11,432 |
People earning less than about £30,000 pay slightly less in Scotland. Higher earners pay noticeably more. National Insurance is the same across the UK, so a Scottish higher rate taxpayer pays 42% income tax plus 2% NIC on earnings above £50,270, but 42% plus 8% between £43,663 and £50,270.
Who is a Scottish taxpayer?
You are a Scottish taxpayer if you live in Scotland. If you have homes in both Scotland and elsewhere in the UK, it depends on which is your main home, or failing that where you spend more days. Where you work does not matter. Scottish taxpayers have tax codes starting with S.
What stays UK-wide
Savings interest and dividends are taxed at UK rates, using the UK bands. Capital gains tax, corporation tax, VAT and National Insurance are also UK-wide. Land and Buildings Transaction Tax replaces Stamp Duty in Scotland.
Planning ideas for Scottish taxpayers
- Pension contributions save tax at up to 45% or 48% and can restore the personal allowance.
- Company owners can take dividends, which are taxed at UK rates, though dividend tax rates are 10.75% and 35.75% in 2026/27.
- Salary sacrifice for pensions or electric cars can be worth more in Scotland.
- Gift Aid donations extend the bands for relief at higher rates.
Example
Fiona earns £80,000 in Edinburgh. Her income above £75,000 is taxed at 45%. A £5,000 gross pension contribution, made through salary sacrifice, saves her £2,250 of income tax and £100 of National Insurance.
Payments on account and Scottish rates
If you pay tax through Self Assessment, your payments on account are based on last year’s bill. If your income has risen into the advanced or top band, your balancing payment on 31 January may be larger than expected, so set money aside during the year.
Frequently asked questions
Do Scottish rates apply to my rental income?
Yes. Property income is non-savings income and Scottish rates apply.
I moved to Scotland in the middle of the year. Which rates apply?
The place you lived for most of the tax year decides for the whole year.
Do Scottish rates affect Gift Aid?
Charities still claim basic rate relief at 20%; you claim any extra through your return.
Will the advanced rate change?
Scottish rates are set each year in the Scottish Budget.
Related: Scottish income tax rates, buying a house in Scotland and pensions and higher rate tax.
Talk to Accotax
Want this handled for you? Our team at Accotax can help with Scottish income tax planning. See our personal tax accountants service, or contact us for a free, no-obligation quote.
This page is general guidance based on HMRC rules for the 2026/27 tax year, checked against gov.uk on 16 October 2026. It is not personal advice, so speak to an accountant about your own situation.
