Glossary · UK
What is Scottish Income Tax?
The income tax bands and rates set by the Scottish Parliament that apply to non-savings, non-dividend income of Scottish taxpayers.
Full Definition
Scottish Income Tax applies to the non-savings, non-dividend income (such as earnings, pensions and rental profit) of people who are Scottish taxpayers, broadly those whose only or main home is in Scotland. The Scottish Parliament sets the rates and bands, while savings and dividend income continues to be taxed at the UK-wide rates. Scotland operates a more progressive structure with more bands than the rest of the UK. For 2026/27 the Scottish bands above the 12,570 Personal Allowance are a 19% starter rate, a 20% basic rate, a 21% intermediate rate, a 42% higher rate, a 45% advanced rate, and a 48% top rate on income above 125,140. The higher-rate threshold is lower than the 50,270 figure used elsewhere in the UK, so middle and higher earners in Scotland generally pay more income tax than equivalent taxpayers in England, Wales or Northern Ireland, while the lowest earners pay slightly less. National Insurance, the Personal Allowance taper above 100,000, and the taxation of savings and dividends remain UK-wide. Scottish taxpayers have tax codes beginning with the letter S. The classification depends on residence rather than where income is earned or where an employer is based.