Scottish income tax
Scotland sets its own income tax rates and bands. They include a starter rate and an intermediate rate, and the higher rates are above those in England. This changes the take-home pay of directors paid a salary in Scotland. Dividend tax, National Insurance and corporation tax are UK-wide. We plan salary and dividends for directors in Scotland using the Scottish bands.
Startups in Edinburgh
Edinburgh has strengths in fintech, tourism and university spinouts. Business Gateway can help with local grants and advice, and our funding page explains how we help you get ready for a loan, a grant or investment.
How does Scottish tax affect Edinburgh's fintech startups and spinouts?
Scottish income tax rates and bands apply to salaries and trading profits in Edinburgh. Dividends, savings income, National Insurance and corporation tax follow UK-wide rules, so the most tax-efficient split between salary and dividends for a director here differs from the split for a director in England. A startup whose sales grow quickly can cross the £90,000 VAT registration threshold part-way through a year, because the test looks at any rolling twelve months. The city's university spinouts also need to plan SEIS and EIS advance assurance, EMI options and R&D relief before investment arrives.
