Scottish vs English income tax: at what salary does it flip?

Somewhere north of Newcastle on a mid-morning train, I watched the fields go past and thought about tax, which says something about my week.

I'd always heard one line repeated: move to Scotland and you pay more income tax. Full stop. I'd never once checked it.

So with the 2026-27 bands open on my phone, I ran the same salaries through both systems. The full stop turned out to be a comma. For some salaries, Scotland comes out cheaper.

Which ones, and where exactly does it turn?

Below a certain salary, Scotland is the cheaper side

These are the three salaries I worked through, all with the standard £12,570 Personal Allowance:

These figures are income tax only.

On low to modest pay, a Scottish taxpayer pays slightly less income tax than someone in England on the same salary. From the low forties upwards, they pay more, and the gap widens with income.

Small saving at the bottom, big extra at the top. Not what the one-liner suggests.

To see why, it helps to put the two sets of bands next to each other.

England, Wales and Northern Ireland (GOV.UK, 2026 to 2027): Personal Allowance up to £12,570; 20% from £12,571 to £50,270; 40% to £125,140; 45% above.

Scotland (GOV.UK, "2026 to 2027 Scottish Income Tax rates"):

• Personal Allowance: up to £12,570, 0%
• Starter rate: £12,571 to £16,537, 19%
• Basic rate: £16,538 to £29,526, 20%
• Intermediate rate: £29,527 to £43,662, 21%
• Higher rate: £43,663 to £75,000, 42%
• Advanced rate: £75,001 to £125,140, 45%
• Top rate: over £125,140, 48%

Both sets assume the standard Personal Allowance. That allowance is the same in Scotland, because the Scottish Parliament's powers exclude it. In both systems it tapers away above £100,000.

Far more bands on the Scottish side. No wonder the comparison isn't a single answer.

The crossover sits lower than I'd have guessed

I wanted to see the £45,000 figure built from the ground up, because that's where the gap first gets noticeable.

Scotland

• Starter: (£16,537 − £12,570) = £3,967 × 19% = £753.73
• Basic: (£29,526 − £16,537) = £12,989 × 20% = £2,597.80
• Intermediate: (£43,662 − £29,526) = £14,136 × 21% = £2,968.56
• Higher: (£45,000 − £43,662) = £1,338 × 42% = £561.96
• Total £6,882.05

England

• (£45,000 − £12,570) = £32,430 × 20% = £6,486.00

The Scottish starter rate saves a little at the bottom. The 21% intermediate band adds it back. Then the 42% higher rate starts at £43,663, while in England the 40% rate starts at £50,271. On a £45,000 salary, that last slice explains most of the gap.

I'd expected the 21% band to be the main culprit. It's actually the early start of the 42% band.

At £28,000 Scotland is still cheaper, because only the 19% and 20% bands are involved:

• Scotland: £753.73 + (£28,000 − £16,537) × 20% = £753.73 + £2,292.60 = £3,046.33
• England: £15,430 × 20% = £3,086.00

So where does it flip?

Between £16,537 and £29,526 both systems charge 20%, so the Scottish saving stays fixed at £39.67. Above £29,526, each extra pound costs 21p in Scotland against 20p in England, and the saving shrinks by 1p per pound. It reaches zero at £29,526 + £3,967 = £33,493.

Above that salary, a Scottish taxpayer pays more income tax than someone in England. Below it, less.

(I worked this crossover out from the published bands. HMRC doesn't state it.)

Lower than I'd have guessed, honestly. I'd have put it somewhere near the 42% line.

Where you live decides it, and not everything changes

Then the obvious next question: who actually counts as a Scottish taxpayer?

GOV.UK says you pay Scottish Income Tax if you live in Scotland. You may also pay it if:

• you move to or from Scotland
• you have a home in Scotland and one elsewhere in the UK
• you have no home but spend more days in Scotland than elsewhere in the UK in the tax year
• you are a member of the Scottish Parliament.

For employment or pension income, a Scottish taxpayer's tax code starts with "S". If you live in Scotland and your code doesn't, or the other way round, contact HMRC.

That one letter is easy to miss. Worth a glance at your next payslip.

And some things don't differ at all.

The Scottish Government explains that, under the Scotland Act 2016, the Scottish Parliament sets the bands (excluding the Personal Allowance) and rates for non-savings, non-dividend income. Savings and dividend income therefore follow the UK rules. It also notes that HMRC collects Scottish Income Tax.

National Insurance doesn't appear among those powers. GOV.UK's National Insurance page lists a single set of Class 1 rates for 2026-27, with no separate Scottish table: for category A, 8% between £242.01 and £967 a week and 2% above that. That's why the comparison above looks at income tax only.

By the time the train pulled in, this is what I'd got down to. Scotland isn't always the dearer side. At £28,000 it's £39.67 cheaper; at £45,000, £396.05 dearer; at £80,000, £2,300.05 dearer. The flip happens at £33,493, and the early 42% band does most of the work above it. Where you live decides which system you're in, and National Insurance, savings and dividends stay on UK rules either way.

The one-liner I'd heard for years was half right, which is a strange thing to discover on a train.

Had you assumed Scotland always costs more, or did you already know the lower bands come out cheaper?

General information, not tax advice. If you're unsure whether you count as a Scottish taxpayer, check with HMRC.

Sources

• GOV.UK, Scottish Income Tax (2026 to 2027 bands): www.gov.uk/scottish-income-tax (checked 2026-10-14)
• GOV.UK, Scottish Income Tax – who pays: www.gov.uk/scottish-income-tax/who-pays (checked 2026-10-14)
• GOV.UK, Income Tax rates and Personal Allowances (2026 to 2027): www.gov.uk/income-tax-rates (checked 2026-10-14)
• Scottish Government, Income Tax policy page (Scotland Act 2016 powers; HMRC collection): www.gov.scot/policies/taxes/income-tax/ (checked 2026-10-14)
• GOV.UK, National Insurance rates and categories (2026 to 2027): www.gov.uk/national-insurance-rates-letters (checked 2026-10-14)