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Scottish Rate of Income Tax



Posted: January 15th, 2016

The Scottish Rate of Income Tax (SRIT) is the amount of Income Tax Scottish taxpayers will have to pay. 

New rates that come in to force from 6 April 2016 will mean that any employer with Scottish tax payers in their team will see changes when processing their payroll.

Scottish taxpayer status

A Scottish taxpayer is someone who is classed as a resident of the UK for tax purposes but has their main place of residence in Scotland.

This means that it doesn’t matter where they work, it is the location of the individual’s main place of residence that is key in deciding Scottish taxpayer status.

As an employer you aren’t required to determine if any of your employees will be Scottish taxpayers, this responsibility lies with HM Revenue and Customs (HMRC).  However, we would recommend that you tell HMRC about any changes in personal circumstances, including changes in address, as soon as possible, as it could amend an individuals’ taxpayer status and therefore, the tax code that is used when processing your payroll.

Tax codes

To identify the different rates, Scottish taxpayers will have their tax codes prefixed with the letter ‘S’.  However, you should not use a tax code prefixed with the letter ‘S’ unless advised to do so by HMRC.

For new starters, HMRC will assess and assign the correct tax code after the first Full Payment Submission (FPS) is received and inform you of what this code is so you can use it moving forward.

Don’t worry however, as you don’t need to do anything different at the moment.  You should continue to use the tax code provided to you by HMRC for all your employees, even if there is a change in their circumstances.

If you would like to know more about these changes and what they mean for your business, please give a member of our team a call today on 01228 711888.

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