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Income Tax is a tax on money you earn. The Scotland Act 2016 provides the Scottish Parliament with the power to set the income tax rates and bands that apply to Scottish taxpayers’ Non-Savings, Non-Dividend (NSND) income. This excludes setting the Personal Allowance, which remains reserved, and is set by the UK Government at the UK Budget. Therefore, Scottish Income Tax remains part of the existing UK Income Tax system and is not a fully devolved tax.
If you pay Scottish Income Tax, you will have an ‘S’ at the beginning of your tax code. This identifies you as a Scottish taxpayer.
Scottish rates and bands for 2022 to 2023
At the Scottish Budget on 9 December 2021, the Cabinet Secretary for Finance and the Economy set out the proposed Scottish Income Tax rates and bands for 2022 to 2023. These were subsequently agreed to by the Scottish Parliament on 2 February 2022 following the Scottish Rate Resolution.
The rates and bands in the table below are based on the UK Personal Allowance in 2022 to 2023, which is £12,570, as confirmed by the UK Government at their 2021 Autumn Budget.
£12,571* - £14,732
£14,733 - £25,688
Scottish Basic Rate
£25,689 - £43,662
£43,663 - £150,000**
* assumes individuals are in receipt of the Standard UK Personal Allowance.
** those earning more than £100,000 will see their Personal Allowance reduced by £1 for every £2 earned over £100,000.
How Scottish Income Tax works
The Scottish Income Tax rates and bands payable by Scottish taxpayers will be those set by the Scottish Parliament. Receipts from Scottish Income Tax will be collected by HMRC and paid to the Scottish Government (via HM Treasury).
If you have any queries about the rate of tax you pay, please contact HMRC. You can call HMRC on 0300 200 3300. Lines are open Monday to Friday from 8am to 6pm.