Scottish Rate of Income Tax (SRIT)
A new Scottish Rate of Income Tax (SRIT) will apply to certain individuals from 6 April 2016.
The SRIT is being introduced as part of the devolved powers transferred to the Scottish Parliament in the Scotland Act 2012.
To help you understand how the SRIT may affect you, we have compiled some common questions and answers below.
Who will be a Scottish tax payer?
HM Revenue & Customs (HMRC) will identify who is a Scottish taxpayer by looking at the current homeaddress they have for individuals.
For most people, if your primary residence is in Scotland, or if you live in Scotland for more than half the year, you'll be considered a Scottish taxpayer. This means some of your Income Tax will be paid to the Scottish Government.
For more information visit theHMRC website.
How will I know if I am a Scottish tax payer?
HMRC will write to everyone they consider will be a Scottish taxpayer by the end of February 2016.
If you consider yourself to be a Scottish tax payer and you have not received a communication from HMRC by then you should contact them directly.
How you pay the Scottish rate
If you’re employed or get a pension, from 6 April 2016, you'll have an 'S' prefix added to your tax code if you're a Scottish taxpayer and the appropriate rate will be collected under Pay As You Earn (PAYE).
Most people’s tax code will be S1100L if you pay the Scottish rate and get thestandard Personal Allowance
YourPersonal Allowance- the amount of income you don’t pay tax on - stays the same. You’ll also pay the same tax as someone whoseprimary residence is inthe rest of the UK on dividends and savings interest.For the tax year 6 April 2016 to 5 April 2017, the SRIT has been set at a rate that means the total amount of tax that someone who is a Scottish taxpayer and someone who is a taxpayer in the rest of the UK will pay on any given employment or pension income will be the same. However, the Scottish Government has the power to change the SRIT rate so this might be the situation in future tax years.
If you fill in aSelf Assessment returnfor the year 6 April 2016 to 5 April 2017 tax year, there’ll be a box for you to tellHMRCyou pay the Scottish rate.
Do I need to do anything?
You won't need to do anything as long as HMRC have your current address details.
If you move from Scotland to another part of the UK or vice versa you should let HMRC know your new address details straightaway. They'll review your tax position so you pay the correct amount of tax.
You canupdate your address withHMRConline
What happens next?
You’ll get a letter from HMRC if they think you should pay the Scottish rate of Income Tax.
If you think they should have contacted you and have not, contact HMRC directly.