⚠️ We are currently updating our 2021/22 tax guidance across the website

 

What is Scottish income tax?

Updated on 12 April 2021

Tax basics

This section tells you about Scottish income tax. Scottish taxpayers pay Scottish income tax and have done so since 6 April 2017.

Image of Scotland covered in the Scottish flag

⚠️ While Scottish income tax applies to the income of armed forces personnel who are Scottish taxpayers in the first instance, they receive a retrospective payment after the end of the tax year to ensure they pay no more income tax than other UK personnel. You can read the commitment in respect of 2018/19 on GOV.UK. Payments were made in June 2019. In addition, a commitment was made to make similar payments in respect of 2019/20. You can read about this on GOV.UK. In July 2020, the UK Government announced a similar payment in respect of 2020/21. They also committed to applying this measure indefinitely, rather than reviewing it on an annual basis. You can read about this on GOV.UK.

Scottish income tax is not a separate tax, nor is it a devolved tax as such.

The Scottish parliament has the power to affect the amount of income tax that Scottish taxpayers pay. To do this, the Scottish parliament can set Scottish rates and bands (of income tax), which determine the rates of income tax payable by Scottish taxpayers on certain types of income.

HMRC administer and collect Scottish income tax, using the Pay As You Earn (PAYE) and Self Assessment systems. This means that if you disagree with a decision concerning Scottish income tax, you must follow the HMRC appeal process. In addition, if you are unhappy with the service provided, you must follow HMRC’s complaints process.

Scottish income tax has applied since 6 April 2017. For 2021/22, the rates and bands of Scottish income tax are as set out in the table below:

Name of Band

Band

Rate of Scottish income tax

Starter

£12,571* to £14,667

19%

Basic

£14,668* to £25,296

20%

Intermediate

£25,297* to £43,662

21%

Higher

£43,663* to £150,000

41%

Top

Over £150,000

46%


* This assumes that you are entitled to the standard UK personal allowance. The starter, basic and intermediate rate bands together for Scottish income tax are £31,092 (£12,570 + £31,092 = £43,662).

The rates and bands of Scottish income tax for 2020/21 were as set out in this table:

Name of Band

Band

Rate of Scottish income tax

Starter

£12,501* to £14,585

19%

Basic

£14,586* to £25,158

20%

Intermediate

£25,159* to £43,430

21%

Higher

£43,431* to £150,000

41%

Top

Over £150,000

46%


* This assumes that you were entitled to the standard UK personal allowance for 2020/21. The starter, basic and intermediate rate bands together for Scottish income tax in 2020/21 were £30,930 (£12,500 + £30,930 = £43,430).

Broadly, Scottish income tax is payable by 'Scottish taxpayers' on their non-savings and non-dividend income. The following pages explore these points in more detail:

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