When does the 45% Scottish advanced income tax rate kick in and how does it differ from rUK additional rate?

Full answer

In Scotland, income tax on earnings (not savings or dividends) follows a six-band system set by the Scottish Parliament. For 2026/27 the advanced rate of 45% applies to income from £62,430 up to £125,140. Below that sit the starter, basic (20%), intermediate (21%) and higher (42%) rates; the higher rate runs from £31,092 to £62,430. Above £125,140 the top rate of 48% applies. These thresholds assume you receive the full UK-wide Personal Allowance of £12,570, which is reserved to Westminster and tapers away by £1 for every £2 of income over £100,000, disappearing entirely at £125,140. In the rest of the UK (England, Wales and Northern Ireland), the structure is simpler: 20% basic to £50,270, 40% higher to £125,140, and 45% additional above £125,140. So the same 45% headline figure means very different things. In Scotland 45% is a middle band on income most rUK earners would pay 40% on; in rUK 45% is the top sliver of income only the highest earners reach. A worked example: someone earning £70,000. In rUK, the slice from £50,270 to £70,000 is taxed at 40%. In Scotland, that same person crosses into the advanced band, so income from £62,430 to £70,000 is taxed at 45%, with the band below taxed at 42% (higher) rather than 40%. The result is a noticeably larger Scottish tax bill at this income level. Note that National Insurance is UK-wide and not devolved: 8% applies on earnings between £12,570 and £50,270, then 2% above, regardless of where you live. Savings and dividend income are also taxed at UK-wide rates everywhere. Wales sets its own rates via WRIT but currently mirrors rUK bands.

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