Since 6 April, there have been changes to Scottish income tax. Here are the main income tax changes and how they could impact your finances if you’re a Scottish taxpayer.
Isabel McDougall, Pensions writer
Last Updated: 06 April 2026
We hope you find this article helpful, but it’s not personal advice. Tax rules can change, and benefits will depend on your circumstances. If you’re not sure what’s right for you, please contact our financial advice team.
Starter rate band threshold increased to £16,537
Basic rate band threshold increased to £29,526
Starter and Basic rate band thresholds increased by 7.4%, well above inflation
No change to Higher, Advanced and Top rate thresholds
Rates unchanged for all bands
It’s estimated that over 39% of adults living in Scotland won’t be affected by the new changes, and no taxpayer will pay more Scottish Income Tax in 2026/27 than they did in 2025/26 on their current income.
It’s expected that 57% of Scottish taxpayers will pay less Income Tax in Scotland than they would elsewhere in the UK.
So, what does this look like?
A taxpayer earning the median income of around £31,136 in 2026/27 is expected to be:
around £24 better off than if they lived elsewhere in the UK
around £32 better off than they were in 2025/26
around £25 better off than if Scottish tax bands had just risen in line with inflation
Source: Scottish Income Tax 2026 to 2027: technical factsheet - gov.scot
| 2025/26 | 2026/27 | |||
|---|---|---|---|---|
| Band | Rate | Band | Rate | |
| Starter | £12,571* - £15,397 | 19% | £12,571*- £16,537 | 19% |
| Basic | £15,398 - £27,491 | 20% | £16,538 - £29,526 | 20% |
| Intermediate | £27,492 - £43,662 | 21% | £29,527 - £43,662 | 21% |
| Higher | £43,663 - £75,000 | 42% | £43,663 - £75,000 | 42% |
| Advanced | £75,001 - £125,140** | 45% | £75,001 - £125,140** | 45% |
| Top | Over £125,140 | 48% | Above £125,140 | 48% |
*Assumes individuals are in receipt of the standard personal allowance.
**Those earning more than £100,000 will see their personal allowance reduced by £1 for every £2 earned over £100,000.
Source: Scottish Budget 2026-27, Scottish Government, www.gov.scot, 13/01/2026.
If you’re set to pay more tax this year following these changes, it’s worth thinking about ways you can reduce your tax bill.
Here are three tips that could help.
The government offers the chance to shelter up to £20,000 from UK income and capital gains tax each tax year in ISAs in the form of your ISA allowance.
It doesn’t just shelter you from tax right now, but also shelters you from more tightening that might be in store in the next few years.
If you‘re aged 39 or under, you can also open a Lifetime ISA (LISA). In a LISA you can use up to £4,000 of your ISA allowance per tax year and receive a 25% bonus from the government (up to £1,000).
You can withdraw money from your LISA to buy your first home or after you turn 60 tax free. You can access the money at other times if you need to, but this comes with a 25% withdrawal charge, so you could get back less than you put in. Be aware, savings outside a pension (like in a LISA) could affect your entitlement to means-tested state benefits.
Most people under 75, can make personal pension contributions of up to £60,000 and benefit from 20% tax relief (even if you pay tax at a rate below this rate). If you pay tax at a higher rate, you can claim back any higher rates of relief through your tax return.
Tax relief on personal contributions are limited by your earnings (or £3,600, if this is greater). So even if you’re a non-taxpayer, you can pay in up to £2,880 each year, and the government would add 20% (£720).
Remember, you have to pay sufficient tax at the higher rates to benefit from that relief. Once you reach the age where you can access your pension (currently 55, increasing to 57 from 2028), you can usually take up to 25% from your pension tax free.
You might have already used your allowances, but have additional income producing assets or assets with capital gains.
If you have, they can generally be passed between spouses (or civil partners) without triggering a tax bill.
That means, both individuals can make use of their respective allowances and potentially reduce their total tax bill.
If you need help or support understanding how the Scottish tax changes impact you, or what you can do about it, a financial adviser could help.
They can review any existing financial plans you have in place, or create a new one unique to your circumstances, to help you prepare for a better future.
Talk to our advisory team to find out what benefit you might see from taking advice, and the costs involved. If you decide to go ahead, they'll put you in touch with an adviser.
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