Scottish Income Tax Rates and how to check if it applies to you

Scottish Income Tax Rates, image of Scottish money | Crunch

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    The Scottish Government has operated a different income tax regime compared to the rest of the UK since the 2018/19 tax year. This means anyone resident in Scotland pays different income tax rates and operates within Scottish tax brackets, using more bands and thresholds compared to the rest of the UK.

    The Scottish tax brackets, income tax rates, bands and thresholds for the 2020/21 tax year, and the previous tax year are shown below.

    Scottish Income Tax Rates and Scottish Tax Thresholds for 2021/22 and 2020/21

    The Scottish Government operates a different income tax regime compared to the rest of the UK, with a lower starter rate and more Scottish tax thresholds and tax bands.

    2021/22 Tax Year 2020/21  Tax Year
    Tax Band name Tax Rate Tax Bands and Thresholds
    Starter rate 19% £12,571* - £14,667 £12,501* - £14,585
    Basic rate 20% £14,668 - £25,296 £14,586 - £25,158
    Intermediate 21% £25,297 - £43,662 £25,159 - £43,430
    Higher rate 41% £43,663 - £150,000 £43,431 - £150,000
    Additional rate 46% Over £150,000 Over £150,000

    The above table assumes the individual is receiving the Personal Allowance for tax-free income of £12,570 in the 2021/22 tax year (£12,500 in the 2020/21 tax year). The Personal Allowance is reduced by £1 for every £2 earned over £100,000. This is the same as the rest of the UK.

    Who is a Scottish taxpayer?

    HMRC will determine whether or not you’re a Scottish taxpayer based on your main place of residence. The Scottish rate of Income Tax is payable for the full year.

    Anyone identified as a Scottish taxpayer will have an “S” prefix attached to their PAYE tax code, and will therefore be subject to Scottish tax brackets, rates, bands, and thresholds.

    What to do if you’re a Crunch client

    Crunch clients who are resident in Scotland need to be aware of these changes so they can estimate their tax liabilities going forward.

    If you are resident in Scotland, even for part of the year, please ensure Crunch and HMRC have been notified. This will ensure you are paying tax correctly.

    If you have any questions, please contact your client managers.

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