Scottish taxpayer status: HMRC opens consultation

scottish parliament exterior
By Anne-Marie Roberts, ICAS Assistant Director Taxation

12 June 2015

HMRC has issued technical guidance on how Scottish taxpayer status should be decided for the Scottish Rate of Income TAX (SRIT).

The Scottish Rate of Income Tax will start in April 2016 and will give the Scottish Parliament the power to alter income tax rates.

The note provides draft technical guidance on the manner in which HMRC will interpret some of the terms used in the sections of the Scotland Act 2012, which set out the definition of a Scottish taxpayer.

The guidance is open for consultation until 31 July 2015.

The SRIT works by reducing the UK rates of income tax by 10 percentage points for "Scottish taxpayers" - but then adding to that the rate set by the Scottish Government.

With a basic rate of 20 per cent and a Scottish rate of 12 per cent, Scottish taxpayers would have a basic rate of 22 per cent (20 per cent UK rate less 10 per cent as a Scottish taxpayers plus 12 per cent as the rate set by Holyrood).

The Scottish Government was given these powers by the Scotland Act 2012 and these were agreed before the Smith Commission made its recommendations.

The definition of a Scottish taxpayer is key in determining if an individual is affected, and the guidance is intended to help resolve the position in complex case – the offshore industry , individuals working in multiple locations.

The SRIT will add further complexity to the PAYE and RTI reporting requirements faced by employers – who will be collecting the tax on behalf of HMRC.


  • Tax

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