Income Tax – regional differences

You will pay Scottish Income Tax if you live in Scotland, Income Tax if you live in England or Northern Ireland and the Welsh Income Tax if you live in Wales.

At present, the only regional variations under the control of the Scottish or Welsh governments are the rates of Income Tax charged.

For 2019-20, the rates set by the Welsh Government are the same as those in England and Northern Ireland. Scottish Income Tax rates have more bands and the higher and top rate are 1% higher than the rest of the UK.

These differences do open up planning opportunities if you live and work in the border areas between England and Scotland.

As you pay tax at Scottish or other UK rates based on where you live, you could choose to live in England and work in Scotland if you pay tax at the higher rates. Obviously, there are many other factors that you will want to consider when choosing where you set up home, but if the regional Income Tax rate differentials start to widen, the ability to reduce your Income Tax burden may become more of a deciding issue.

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