Scotland is beautiful. But people who live there – or move there – may pay more income tax. The Scottish Government has finalised its tax bands and rates for 2025/26, and if you earn over £30,318 a year you will pay more tax in Scotland from April than in the rest of the UK. In 2024/25 the break-even point was £28,867. And the more you earn, the bigger the difference. The Scottish Government estimates typical (or median full-time pay in Scotland in 2024 was £38,464 a year – half of full-time workers earn more than that, half less. On those earnings people will pay £81.46 a year more tax than if they lived south of the border. Earn £50,270 and you will pay £1,587.20 a year more income tax, and on £100,000 the tax is £3,331.80 higher.

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Higher earners in Scotland pay higher rates of tax than the rest of the UK, and the thresholds where they begin are lower. For example, higher-rate tax begins on incomes above £43,662 in Scotland, compared with £50,270 elsewhere – and the rate is 42%, not 40%. An “Advanced Rate” of 45% begins above £75,000. In England that rate is charged on income above £125,140. The Personal Allowance of £12,570 a year is fixed in Westminster and is the same throughout the UK, as is National Insurance.

Scottish tax rates apply to most income including wages, pensions and rents, but not to interest on savings or to dividends. Anyone who lives in Scotland for most of the year pays Scottish income tax; their tax code starts with “S”. To change it, move your permanent residence south of the border for more than half the tax year.

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There are financial advantages to living in Scotland, however. NHS prescriptions are free to everyone, compared with £9.90 an item for most people aged 17 to 59 in England (but also free in Wales and Northern Ireland). Scottish university students pay no tuition fees – they will be £9,535 a year from August in England and Wales. Personal care and places in care and nursing homes cost less in Scotland than the rest of the UK. And Scotland has a growing range of welfare benefits – for example for new mothers and pensioners – that improve on those set by Westminster.

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