I live in England but work in Scotland — which income tax rates apply to my salary in 2026/27?

Full answer

Income tax residency for the Scottish and Welsh devolved rates is based on where you live, not where you work. HMRC assigns you a tax residency status from your main place of residence over the tax year. Because your only or main home is in England, you are a rest-of-UK (rUK) taxpayer for 2026/27, so the England, Wales and Northern Ireland rates apply to your employment income regardless of your Scottish employer or workplace. Your tax code will carry an S prefix only for Scottish taxpayers — you should have a standard code (e.g. 1257L), not S1257L. If you see an S code despite living in England, contact HMRC to correct it. On a £45,000 salary you pay the rUK 20% basic rate. With the £12,570 Personal Allowance, £32,430 is taxed at 20% = £6,486. A Scottish taxpayer on the same salary would face the 21% intermediate band on part of their income (£31,092–£62,430) plus the 19% starter and 20% basic bands, giving a slightly different bill — but that does not affect you. Above £50,270 you pay rUK 40% to £125,140, then 45%, rather than Scotland's 42% advanced and 45%/48% top rates. National Insurance is UK-wide and identical wherever you live: 8% on earnings between £12,570 and £50,270, then 2% above. Your Personal Allowance (£12,570, tapering by £1 for every £2 over £100,000) is also UK-wide. If you later make Scotland your main home, your status switches to Scottish taxpayer and the S-prefix code and Scottish bands would then apply. The reverse is true if you move from Scotland back to England. Where you spend more time, or which residence is genuinely your main home, settles any ambiguity.

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