Income Tax in Scotland vs England - Who Pays More?

11th January 2026

or decades, income tax has been one of the most visible ways governments influence wealth distribution.

In the UK, the system is now split. Scotland sets its own income tax rates on earned income, while England, Wales, and Northern Ireland follow a separate system. The result is that where you live can make a substantial difference to how much you take home — especially if you earn a high salary.

The Basics of Income Tax

Both systems begin with a personal allowance: for 2025/26, the first £12,570 of income is tax-free. Beyond that, tax bands kick in. In England, the standard rates are 20% (basic), 40% (higher), and 45% (additional), applied progressively as income rises. Scotland, however, has more bands: a starter rate at 19%, basic at 20%, intermediate at 21%, higher at 42%, advanced at 45%, and a top rate of 48% for incomes above £125,140.

Low-to-Mid Incomes: Little Difference

For earners on modest salaries, the difference is minimal. Someone earning £30,000 per year in either Scotland or England will pay around £3,485-£3,486 in income tax — nearly identical. National Insurance contributions, which are uniform across the UK, further even out take-home pay at this level.

High Earners: Scotland's Top Rate Hits Harder

The story changes dramatically at higher incomes. A person earning £150,000 will see a stark contrast:

England: approximately £48,675 in income tax

Scotland: approximately £54,013 in income tax

After adding National Insurance, take-home pay is roughly £94,800 in England versus £89,500 in Scotland, meaning Scottish high earners take home £5,300 less annually for the same gross salary. This difference is entirely due to Scotland’s 48% top tax rate and its more progressive band structure.

Implications

These differences have tangible consequences:

High-income households in Scotland bear a heavier tax burden.

Location choices for professionals may increasingly be influenced by tax considerations.

The Scottish Government argues that higher rates fund public services and social investment, but the trade-off is lower net pay for the highest earners.

In short, while the difference is negligible for lower earners, Scottish income tax can be a significant factor for high-income households, affecting disposable income, lifestyle decisions, and perceptions of fairness.