Making Tax Digital for Income Tax (MTD) works the same wherever you live in the UK. What can change is how much tax you pay on the same profit. Here’s what’s the same, what’s different, and what it means for your quarterly updates.
The same everywhere
These rules don’t depend on which part of the UK you live in:
- the MTD thresholds: over £50,000 from April 2026, over £30,000 from April 2027 and over £20,000 from April 2028
- the quarterly update deadlines: 7 August, 7 November, 7 February and 7 May
- the 31 January tax return
- the penalties
- the software rules
- Class 4 National Insurance, which is UK-wide: 6% on profits between £12,570 and £50,270, and 2% above that
The full list of dates is in our MTD deadlines guide.
Scotland
Scottish taxpayers pay Scottish income tax rates on their earnings, including self-employed profit. There are six bands instead of three. These are the 2026/27 bands:
| Band | Income | Rate |
|---|---|---|
| Personal allowance | up to £12,570 | 0% |
| Starter | £12,571 to £16,537 | 19% |
| Basic | £16,538 to £29,526 | 20% |
| Intermediate | £29,527 to £43,662 | 21% |
| Higher | £43,663 to £75,000 | 42% |
| Advanced | £75,001 to £125,140 | 45% |
| Top | over £125,140 | 48% |
You’re a Scottish taxpayer if you live in Scotland, not if your business is based there.
Wales
The Welsh rates of income tax match those in England for 2026/27: 20%, 40% and 45% on the same bands. HMRC collects them in the same way, so nothing changes for MTD.
Northern Ireland
Northern Ireland uses the same income tax rates as England, and MTD applies in the same way. Special VAT rules for goods under the Windsor Framework don’t affect income tax.
Worked example: the same profit in Glasgow and Leeds
Take two sole traders who each make £45,000 profit in 2026/27, with no other income. One lives in Glasgow and one in Leeds.
| Item | Glasgow | Leeds |
|---|---|---|
| Income tax | £6,882.05 | £6,486.00 |
| Class 4 National Insurance | £1,945.80 | £1,945.80 |
| Total | £8,827.85 | £8,431.80 |
The Glasgow income tax adds up like this:
- Starter: £3,967 at 19% = £753.73
- Basic: £12,989 at 20% = £2,597.80
- Intermediate: £14,136 at 21% = £2,968.56
- Higher: £1,338 at 42% = £561.96
In Leeds, £32,430 (the £45,000 profit minus the £12,570 personal allowance) is taxed at 20%, which is £6,486.00. Class 4 is 6% of the same £32,430, so it’s £1,945.80 in both cities.
The Scottish sole trader pays £396.05 more, all of it income tax. National Insurance is the same across the UK.
What it means for your quarterly updates
A quarterly update is the same wherever you live: a summary of your income and expenses, sent by the same dates. Your location only affects how your tax bill is worked out. The same profit can mean a different bill, so check which band you’re in before you decide how much to set aside.
Kletta is HMRC-recognised Making Tax Digital software for sole traders. Keeping your books and building your tax return is free. You pay only when you’re ready to send to HMRC (see pricing). Not in Making Tax Digital yet? Get Kletta Duo free until your first Making Tax Digital deadline.
Frequently asked questions
I live in Scotland but work in England. Which rates do I pay?
The rates depend on where you live, not where you work. If you live in Scotland, you pay Scottish income tax rates.
Do Scottish sole traders have different MTD deadlines?
No. The quarterly deadlines and the 31 January tax return are the same across the UK.
Does MTD apply in Northern Ireland?
Yes. MTD for Income Tax applies in Northern Ireland in the same way as in the rest of the UK.
