Scottish Tax Codes: S Prefix and Residency

When HMRC identifies you as a Scottish taxpayer, it adds an S prefix to your tax code. This single letter instructs payroll software to apply Scottish income tax rates and bands rather than the rates used in England, Wales, and Northern Ireland.

The personal allowance itself is set by the UK Government and is the same across the whole of the UK. For 2026–27 it is £12,570, regardless of where you live. What the S prefix changes is what happens to your income above that allowance. Scotland has six income tax bands compared to the three used in the rest of the UK, and the rates at each band differ — particularly in the middle and upper ranges, where Scotland charges more.

The S prefix does not affect National Insurance. NI is a UK-wide system administered by HMRC centrally, and NI rates and thresholds are identical whether you live in Scotland, England, Wales, or Northern Ireland. Only income tax is devolved to the Scottish Parliament.

If HMRC has not yet registered your Scottish residency — for example because you have recently moved — your employer may be applying the wrong rates. You should check your code in your HMRC personal tax account and contact HMRC if the S prefix is missing when it should be present.

These are salary/income thresholds for someone with the standard allowance, not amounts to subtract from the allowance again. They apply to Scottish non-savings, non-dividend income in 2026/27.

Whole-pound ranges are used for readability. Above £100,000 adjusted net income, the Personal Allowance tapers and creates additional tax; do not apply the table as if the full £12,570 remains available. Savings and dividends follow separate UK rules.

Just as England, Wales, and Northern Ireland use BR and D0 for secondary employment income, Scotland uses the equivalent S-prefixed flat-rate codes. These are applied when a second or subsequent employment or pension sits in a specific Scottish band and no personal allowance is available there.

• SBR — Scottish Basic Rate, 20% on all earnings from that employment. Used when a second job falls within the Scottish basic-rate band.
• SD0 — Scottish Intermediate Rate, 21% on all earnings. Used when income from that source falls within the intermediate band.
• SD1 — Scottish Higher Rate, 42% on all earnings. Used when all additional income is in the higher band (above £43,662 combined).
• SD2 — Scottish Advanced Rate, 45% on all earnings. Used when all additional income is in the advanced band (above £75,000 combined).
• SD3 — Scottish Top Rate, 48% on all earnings. A newer code for those with combined income above £125,140 where all additional income attracts the top rate.

Note that these codes do not map directly onto the rest-of-UK flat-rate codes by name. The Scottish D0 equivalent is SD1 (at 42%), not SD0 (which is 21%). Be careful when comparing codes across the border.

The following table shows the approximate difference in annual income tax between a Scottish taxpayer and a taxpayer in England, Wales, or Northern Ireland at the same salary, for 2026–27. Negative figures indicate Scotland charges more.

These are approximate figures. Actual deductions depend on pension contributions, student loans, benefits in kind, and other adjustments. Use the payslip checker or calculator with Scotland selected for an estimate using your salary and circumstances.

Scottish taxpayer status is based on your residence circumstances, not your employer's address. Living in Scotland while commuting to England can make you a Scottish taxpayer; working in Scotland while living in England does not by itself do so.

For an ordinary move within the UK, HMRC says Scottish Income Tax applies if you live in Scotland for a longer period than anywhere else in the UK during that tax year. There is no general rule based solely on your address on 5 April.

If you have multiple homes or no clear main residence, additional tests apply. Use HMRC's multiple-home guidance rather than choosing a tax region based only on where you work.

Tell HMRC directly when your address changes. Updating a GP or telling your employer does not replace that step.

If the move changes your tax status, the new rates apply back to 6 April of the tax year in which you moved, not simply from the move date or the following tax year. PAYE can then adjust the tax collected. Your circumstances may mean that a move does not change your status for that year.

Check the coding notice and ask payroll when it will apply it. See HMRC's moving guidance.