Scottish income tax rates
Scottish taxpayers have a Government which has a different approach to income tax and spending. It has increased tax rates for higher earners and inserted new tax bands from 6 April 2018.
Unfortunately, the Scottish tax bands don't align with the thresholds for National Insurance Contributions (NIC), which are set by the UK Government. The Scottish tax rates and bands also don't apply for savings and dividend income, nor for Capital Gains Tax.
The Scottish Income Tax and NIC bands for 2018/19 are shown in the table.
Tax bands for 2018/19
| Income in band £ | Scottish tax rates | Class 1 NIC rates % | Total rate on band |
|---|---|---|---|
| 0 – 8,424 | 0 | 0 | 0 |
| 8,425 – 11,850 | 0 | 12 | 12 |
| 11,851 – 13,850 | 19 | 12 | 31 |
| 13,851 – 24,000 | 20 | 12 | 32 |
| 24,001 – 43,430 | 21 | 12 | 33 |
| 43,431 – 46,350 | 41 | 12 | 53 |
| 46,351 – 100,000 | 41 | 2 | 43 |
| 100,001 – 123,700 | 61.5* | 2 | 63.5 |
| 123,701 to 150,000 | 41 | 2 | 43 |
| Over 150,000 | 46 | 2 | 48 |
* The rate between £100,000 and £123,700 is an effective rate that applies due to the withdrawal of the personal allowance above £100,000.
You are classified as a Scottish taxpayer if your main home is in Scotland, in which case you should have a PAYE code that starts with 'S'. HMRC use your correspondence address as the indicator of your main home, unless you inform them otherwise.
If you are a self-employed Scottish taxpayer, you will pay the Scottish Income tax rates as per the table, plus NIC at 9% instead of 12% paid by employees.
Tax relief on pension contributions is given at 20%, even for Scottish taxpayers who pay tax at only 19%. Any additional tax relief due for pension contributions at 21% or higher rates will have to be claimed in your tax return, or by contacting HMRC.