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Tue, 05 May 2026

Tue, 05 May 2026 Border politics - how similar jobs in the same firm deliver different tax bills

Workers in southern Scotland can find themselves paying more tax than colleagues who live south of the border.

* Scotland has its own six-tier income tax system, which taxes lower earners less and higher earners more than in England.
* Since 2018, this system has applied to Scottish residents, with rates ranging from 19% for "starter" rate taxpayers up to 48% for the highest earners.
* The difference between Scottish and English tax rates is most noticeable for high-earners, with someone living in Gretna earning £50,000 a year paying £1,496 more in income tax than their equivalent colleague in Carlisle.
* Most Scots pay less tax under this system, with 55% of residents expected to pay less than they would if they lived in England. However, the savings are small for lower earners and much higher for higher earners.
* The Scottish government has devolved powers over public spending, using income generated by the higher tax rates to fund services such as free university tuition fees, NHS prescriptions, and water bills included with council tax.
* Ahead of the Scottish parliament election, main political parties have released their plans for income tax. Key proposals include: + Scottish Conservatives: raise the threshold for paying income tax in line with inflation and increase the higher rate threshold to match the UK system + SNP: keep Scotland's income tax system as is, citing it as "fairest" and most progressive in the UK + Scottish Labour: not increase income tax rates during the next parliament but aim to lower the tax burden for Scots + Scottish Liberal Democrats: lift tax thresholds in line with inflation and begin to close the tax differential with England + Reform Party Scotland: restore income tax bands in Scotland to align with the UK system and implement a 1p cut below each band + Scottish Greens: retain a "progressive and redistributive" income tax system and set a higher rate for landlords' rental income