What are Scottish
tax codes?
Scottish tax codes have an S prefix (e.g. S1257L, SBR) and apply if you are a Scottish taxpayer. Scottish income tax rates for 2025/26 differ significantly from the rest of the UK.
Scottish tax codes carry an S prefix and apply Scottish income tax rates, which are set by the Scottish Parliament and differ from the rest of the UK. For 2025/26, Scotland has six income tax bands compared to three in England, Wales, and Northern Ireland. If you live in Scotland, your employer uses a Scottish tax code to calculate your income tax, even if you work for an employer based in England.
- Scottish Tax Code (S prefix)
- A tax code beginning with the letter S, indicating that you are a Scottish taxpayer. Scottish income tax rates are set by the Scottish Parliament and apply to your non-savings, non-dividend income. The S prefix can appear before any standard code: S1257L, SBR, SD0, SD1, SD2, or S0T. Your Personal Allowance remains the same as the rest of the UK (\u00a312,570 for 2025/26) but the rates applied to income above that threshold are different.
Scottish income tax rates 2025/26
Scotland operates six income tax bands for 2025/26, compared to three in the rest of the UK (rUK). The Personal Allowance of £12,570 is set by Westminster and applies equally across the UK. It is the rates above that threshold where Scotland diverges.
Scottish income tax bands 2025/26:
| Band | Taxable income | Scottish rate | rUK rate |
|---|---|---|---|
| Personal Allowance | Up to £12,570 | 0% | 0% |
| Starter rate | £12,571 to £14,876 | 19% | 20% (Basic) |
| Basic rate | £14,877 to £26,561 | 20% | 20% (Basic) |
| Intermediate | £26,562 to £43,662 | 21% | 20% (Basic) |
| Higher rate | £43,663 to £75,000 | 42% | 40% |
| Advanced rate | £75,001 to £125,140 | 45% | 40% |
| Top rate | Above £125,140 | 48% | 45% |
Key differences from the rest of the UK:
- Scotland's starter rate of 19% is 1p lower than the rUK basic rate. Earners below £14,876 pay slightly less in Scotland.
- The intermediate rate of 21% applies from £26,562. In rUK, the basic rate of 20% continues all the way to £50,270.
- Scotland's higher rate of 42% kicks in at £43,663, compared to 40% at £50,271 in rUK. Scottish earners hit the higher rate band almost £7,000 sooner.
- Scotland has an advanced rate of 45% on income between £75,001 and £125,140. In rUK, the 40% higher rate applies across this entire range.
- The top rate of 48% in Scotland is 3% higher than the rUK additional rate of 45%.
The Personal Allowance taper works identically in Scotland: £1 of allowance is removed for every £2 of income above £100,000, reaching zero at £125,140. This creates an effective marginal rate of about 68% in Scotland (45% + the effect of the taper) on income between £100,000 and £125,140.
How to know if you are a Scottish taxpayer
Your tax code is determined by where you live, not where you work. HMRC uses the address on their records to decide whether you are a Scottish taxpayer. The rules are:
- You live in Scotland on 6 April (the start of the tax year). If your main residence is in Scotland on that date, you are a Scottish taxpayer for the entire 2025/26 tax year.
- You move to Scotland during the year. If you spend more days in Scotland than anywhere else in the UK during the tax year, you become a Scottish taxpayer. HMRC applies the S prefix from the start of the tax year, not from the date you moved.
- You move out of Scotland during the year. If you spend more days outside Scotland, you lose Scottish taxpayer status for the whole year.
- You work in England but live in Scotland. You are a Scottish taxpayer. Your employer uses Scottish rates regardless of where the business is located.
- You work in Scotland but live in England. You are NOT a Scottish taxpayer. English (rUK) rates apply.
The key principle is residence, not employment location. A doctor living in Edinburgh who works at a hospital in Newcastle is a Scottish taxpayer. A consultant living in Carlisle who commutes to Glasgow is not.
If you move house, update your address with HMRC through your Personal Tax Account. HMRC will then issue the correct code (with or without the S prefix) to your employer.
Every Scottish tax code explained
Here is what each Scottish tax code means on your payslip:
| Code | Meaning |
|---|---|
| S1257L | Standard Scottish code. You receive the full Personal Allowance of £12,570 and pay Scottish rates on income above that. This is the Scottish equivalent of 1257L. |
| SBR | Scottish Basic Rate. All income from this source is taxed at 20% with no Personal Allowance. Used for second jobs or pensions where your main employment already uses your allowance. Equivalent of BR in rUK. |
| SD0 | Scottish Intermediate Rate. All income from this source is taxed at 21%. Applied when your main income already uses your basic rate band and this secondary income falls in the intermediate band. |
| SD1 | Scottish Higher Rate. All income from this source is taxed at 42%. Used when total income from all sources places this income in the higher rate band. |
| SD2 | Scottish Advanced Rate. All income from this source is taxed at 45%. Applied when total income exceeds £75,000 and this secondary source falls in the advanced band. |
| S0T | Scottish Zero Allowance. No Personal Allowance is applied and income is taxed through all Scottish bands (19%, 20%, 21%, 42%, 45%, 48%). Often an emergency code when HMRC has incomplete information. |
Less common Scottish codes:
- SK followed by a number (e.g. SK100): a Scottish K code. Your deductions exceed your allowance, so extra tax is collected through your wages.
- S1257L W1 or S1257L M1: standard Scottish code on a non-cumulative (emergency) basis. See the W1 and M1 guides for how to fix this.
- ST: Scottish T code. HMRC is applying additional calculations, such as Personal Allowance tapering for income above £100,000.
Scottish vs rest of UK: how much difference does it make?
The practical difference depends entirely on your income level. Here is a worked example for a £50,000 salary:
£50,000 salary -- Scotland vs England (2025/26):
| Component | Scotland | England (rUK) |
|---|---|---|
| Personal Allowance | £12,570 (0%) | £12,570 (0%) |
| Starter rate (19%) | £2,306 x 19% = £438.14 | -- |
| Basic rate (20%) | £11,685 x 20% = £2,337 | £37,430 x 20% = £7,486 |
| Intermediate (21%) | £17,101 x 21% = £3,591.21 | -- |
| Higher rate (42%/40%) | £6,338 x 42% = £2,661.96 | -- |
| Total income tax | £9,028.31 | £7,486.00 |
| Difference | £1,542.31 more in Scotland |
At £50,000, a Scottish taxpayer pays approximately £1,542 more in income tax per year than someone on the same salary in England. That is roughly £128.50 per month.
Where Scotland is cheaper: Below approximately £28,000, Scottish taxpayers pay slightly less tax than rUK taxpayers because the starter rate of 19% is lower than the rUK basic rate of 20%. The crossover point where Scotland becomes more expensive is around £28,000-£29,000.
At higher incomes: The gap widens significantly. At £75,000, the difference is approximately £3,400. At £125,000, it exceeds £5,200. The 48% top rate (vs 45% in rUK) adds a further 3p per pound on income above £125,140.
National Insurance is the same. NI rates are set by Westminster and apply equally across the UK. Only income tax differs between Scotland and rUK.
Common mistakes with Scottish tax codes
1. Assuming you are a Scottish taxpayer because you work in Scotland. Tax residency is based on where you live, not where you work. If you live in Berwick-upon-Tweed (England) and commute to Edinburgh, you are not a Scottish taxpayer. Your code should not have an S prefix.
2. Not telling HMRC you have moved. If you move from England to Scotland (or vice versa), HMRC does not know unless you tell them. Update your address through your Personal Tax Account or by calling 0300 200 3300. Without the update, your employer may apply the wrong rates for an entire tax year.
3. Thinking the S prefix changes your Personal Allowance. It does not. The Personal Allowance of £12,570 is set by Westminster and is identical for Scottish and rUK taxpayers. The S prefix only changes the rates applied to income above your allowance.
4. Comparing take-home pay without adjusting for NI. Online comparisons sometimes mix up income tax and National Insurance. NI is the same across the UK. Only income tax differs. When comparing Scotland vs England, isolate the income tax component.
5. Forgetting about the advanced rate band. Scotland has a rate band (45% on £75,001-£125,140) that does not exist in rUK. Higher earners who move to Scotland sometimes underestimate their tax bill because they compare Scottish "higher rate" (42%) with rUK "higher rate" (40%) without realising Scotland has an additional band above it.
How to check and correct your Scottish tax code
Step 1: Check your payslip. Look for the S prefix before your tax code. If you live in Scotland and see 1257L without the S, your code is wrong and you may be paying the wrong amount of tax.
Step 2: Log into your HMRC Personal Tax Account. Go to gov.uk/personal-tax-account. Check that your address is correct and up to date. HMRC uses your registered address to determine your tax code prefix.
Step 3: Update your address if you have moved. If you recently moved to or from Scotland, update your address in your Personal Tax Account. HMRC will issue a new code with the correct prefix (S for Scotland, C for Wales, or no prefix for England and Northern Ireland).
Step 4: Contact HMRC if the code is wrong. Phone 0300 200 3300 if your online account does not resolve the issue. They can issue a corrected code to your employer within days.
Step 5: Check your P2 coding notice. Every time HMRC changes your code, they send a P2 notice explaining why. If you received one showing an S prefix and you do not live in Scotland (or vice versa), contact HMRC immediately.
For self-employed Scottish taxpayers: If you file Self Assessment, your Scottish rates are applied automatically based on the address HMRC holds for you. There is no separate S prefix for Self Assessment, but your tax calculation will use Scottish bands. Under Making Tax Digital (mandatory from April 2026 for income above £50,000), your quarterly submissions will be taxed at Scottish rates if HMRC's records show a Scottish address.
People also ask
- Scottish tax codes have an S prefix (e.g. S1257L, SBR, SD0) and apply Scottish income tax rates set by the Scottish Parliament
- Scotland has six income tax bands for 2025/26: 19%, 20%, 21%, 42%, 45%, and 48%
- Your Personal Allowance is the same as the rest of the UK at £12,570: only the rates above it differ
- Scottish taxpayer status is based on where you live, not where you work
- Below approximately £28,000, Scottish taxpayers pay slightly less income tax than rUK. Above that, they pay more
- If you move to or from Scotland, update your address with HMRC to get the correct tax code prefix
- National Insurance rates are identical across the UK: only income tax is devolved to Scotland
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