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Chartered Certified Accountants
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Scotland’s Finance Secretary has made radical changes to income tax rates for 2018/19

The table below shows the Sottish income tax rates and allowances for 2018/19:

Personal tax-free allowance


Start rate 19%

£11,851 to £13,850

Basic rate 20%

£13,851 to £24,000

Intermediate rate 21%

£24,001 to £44,274

Higher rate 41%

£44,275 to £150,000

Additional rate 46%

£150,001 and above


The new tax rates make it important that employers, wherever they are in the UK, apply the special tax codes for Scottish workers. Scottish tax codes can be identified by starting with an ‘S’.

Employees can gain or lose their Scottish taxpayer status at any time where they permanently move to another part of the UK. When this happens part way through a tax year the change of tax residency applies for the whole year.

Where HMRC becomes aware of a change in status they will issue or withdraw an ‘S’ code. Any refund resulting from a change of code will be made through the PAYE scheme.

As an employer, your payroll software will work out the tax for ‘S’ codes, but it is important you keep it up to date with changes to employees’ addresses so HMRC can assess if an ‘S’ code is required.

30 Jan 2018

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