Border politics - how similar jobs in the same firm deliver different tax bills
Summary
People doing similar jobs at the same company pay different income taxes depending on whether they live in Scotland or England. Scotland has a tax system with more levels, charging higher rates to better-paid workers, so those living in Scotland may pay more tax than their English neighbors.Key Facts
- Scotland uses a six-tier income tax system introduced in 2018.
- Lower earners in Scotland pay slightly less tax than similar earners in the rest of the UK.
- Higher earners in Scotland pay more, with tax rates going up to 48%, compared to England’s lower rates.
- Two employees at the same firm near the Scotland-England border pay different taxes because of where they live.
- Someone earning £50,000 in Scotland pays about £1,500 more a year in tax than someone earning the same in England.
- About 55% of Scots pay less tax than if they lived elsewhere in the UK, but the savings for lower earners are small.
- Higher earners notice the bigger tax differences, sometimes thousands of pounds annually.
- The extra tax collected in Scotland helps pay for local public services.
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