Guide
Scottish income tax vs the rest of the UK
Income tax is devolved; National Insurance is not. The interaction between the two produces a band where a Scottish taxpayer pays 50% on the next £100 and someone in England pays 28%.
The Scottish Parliament sets the rates and thresholds on non-savings, non-dividend income for Scottish taxpayers. Westminster sets National Insurance for the whole UK. Neither is designed around the other, and where they collide the result is a marginal rate nobody intended.
| Band | Scotland | Rest of UK |
|---|---|---|
| Personal allowance | £0 – £12,570 · 0% | £0 – £12,570 · 0% |
| First taxed band | £12,571 – £16,537 · 19% | £12,571 – £50,270 · 20% |
| £16,538 – £29,526 · 20% | — | |
| £29,527 – £43,662 · 21% | — | |
| Higher | £43,663 – £75,000 · 42% | £50,271 – £125,140 · 40% |
| Advanced | £75,001 – £125,140 · 45% | — |
| Top | above £125,140 · 48% | above £125,140 · 45% |
Side by side, at every income
| Salary | Take-home (Scotland) | Take-home (rest of UK) | Difference | Marginal: Scotland | Marginal: rest of UK |
|---|---|---|---|---|---|
| £20,000 | £17,959.27 | £17,919.60 | +£39.67 | 28% | 28% |
| £30,000 | £25,154.53 | £25,119.60 | +£34.93 | 29% | 28% |
| £40,000 | £32,254.53 | £32,319.60 | −£65.07 | 29% | 28% |
| £45,000 | £35,523.55 | £35,919.60 | −£396.05 | 50% | 28% |
| £50,000 | £38,023.55 | £39,519.60 | −£1,496.05 | 50% | 28% |
| £60,000 | £43,607.35 | £45,357.40 | −£1,750.05 | 44% | 42% |
| £75,000 | £52,007.35 | £54,057.40 | −£2,050.05 | 47% | 42% |
| £100,000 | £65,257.35 | £68,557.40 | −£3,300.05 | 69.5% | 62% |
| £110,000 | £68,307.35 | £72,357.40 | −£4,050.05 | 69.5% | 62% |
| £150,000 | £85,355.05 | £91,286.40 | −£5,931.35 | 50% | 47% |
Below about £33,500 a Scottish taxpayer keeps slightly more, because the 19% starter rate undercuts the 20% basic rate. Above it they keep less, and the gap widens with income.
Who counts as a Scottish taxpayer
It is decided by where your main home is for most of the tax year, not by where your employer is, where you
work, or where you were born. HMRC assigns an S prefix to the tax code of anyone it records as
Scottish. If you move across the border partway through a year, the rule is where you lived for the greater
part of it.
National Insurance, student loan repayment and the personal allowance taper are all UK-wide and identical on both sides.
What a move across the border actually changes
Only the income tax line. National Insurance is identical, the personal allowance is identical, student loan thresholds are identical, and savings and dividend income is taxed at UK-wide rates wherever you live. So the difference between two payslips on the same salary either side of the border is one number, and it is computable exactly rather than estimated.
The status follows your main home rather than your employer, so moving does not require changing job and changing job does not change your status. HMRC applies the S prefix to your tax code once your address is updated, and it is worth checking that it has: an incorrect prefix is one of the more common reasons a payslip disagrees with a calculator, in both directions.
Why the gap is not a single number
The question "do Scots pay more income tax" has no constant answer, and the reason is structural rather than political. Scotland has six bands where the rest of the UK has three, over the same UK-wide personal allowance, and the boundaries do not line up with each other or with the National Insurance thresholds, which are not devolved. So the difference between the two regimes changes sign and size as income rises.
At the bottom, a Scottish taxpayer pays slightly less, because the 19% starter rate undercuts the 20% basic rate. The two cross over in the high twenties. From there the gap widens, sharply at the point where Scotland's higher rate begins several thousand pounds below the UK higher-rate threshold. The comparison table on this page shows the crossover explicitly rather than quoting an average, because an average over a range where the answer changes sign is not a useful number.
The window the mismatch creates
The most interesting consequence is not the level of tax but a quirk of the margin. Because the Scottish higher rate starts below the National Insurance upper earnings limit, there is a stretch of income where a Scottish taxpayer is paying the higher rate of income tax and the full 8% rate of National Insurance at the same time — a combination the rest of the UK never experiences, because there the two thresholds coincide. Inside that window the rate on further pay is higher than it is twenty thousand pounds further up the scale.
Nobody legislated that window. It is what two independent sets of thresholds produce when they are set by two parliaments that do not coordinate them, and it is invisible in either rate table on its own.
Who counts as a Scottish taxpayer
It is decided by where your main home is for most of the tax year, not by where you work, where your
employer is based, or where you were born. HMRC applies an S prefix to the tax code of a
Scottish taxpayer. If you move across the border partway through a year, the test is where you lived for
the greater part of it. Savings interest, dividends and National Insurance are all UK-wide regardless.
Checking this against your own payslip
Everything above is arithmetic on published parameters, which means it can be checked rather than trusted — and the check is worth doing, because the most common reason a figure here differs from your payslip is not an error on either side. Four things account for nearly all of it.
A tax code that is not the standard one changes your allowance, and codes carrying an adjustment from an earlier year are common. A benefit in kind — a company car, private medical cover — is taxed through the code and does not appear as pay. A workplace pension deducted before tax reduces taxable pay, so your gross and your taxable figure are not the same number. And National Insurance is charged per pay period rather than annually, which is why a month containing a bonus takes proportionally more than the annual figures here imply, and why the year-end total still reconciles.
If none of those explains the gap, it may be an error on this side, and that is worth an email to corrections@taxwedge.com. Corrections are published with a date at /changes/ whether or not anyone else would have noticed.
Questions people actually ask
Do Scots pay more income tax?
It depends on income. Below about £33,500 a Scottish taxpayer keeps marginally more, because the 19% starter rate undercuts the rest of the UK's 20%. Above that they pay more, and the gap widens: at £100,000 the difference is £3,300.05 a year.
Why is the marginal rate 50% at £45,000 in Scotland?
Because Scotland's higher rate starts at £43,663 while the National Insurance upper earnings limit is £50,270. In that window you pay 42% income tax and 8% National Insurance at the same time. The rate falls to 44% above £50,270, when NI drops to 2%.
Which rates apply if I live in Scotland but work in England?
Scottish rates. Liability follows your main residence, not your workplace or your employer's location.