As from 6th April 2016 the main UK rates of income tax will be reduced by 10p in the pound for Scottish taxpayers, leaving the Scottish Parliament able to levy a Scottish Rate of Income Tax (SRIT). The rate bands will not be affected.

For example, if the SRIT is set at 12% and the UK rates remain at 20% basic, 40% higher and 45% additional, the Scottish rates would become 22% basic, 42% higher and 47% additional.

It is therefore crucial to identify who will be a Scottish taxpayer.

HMRC will write to those they believe to be Scottish taxpayers in December 2015. Although, under self-assessment rules, it will ultimately for the individual to decide whether or not they are a Scottish taxpayer.

Employers will need to be able to identify Scottish taxpayers and this will be done by a letter “S” prefix to the code number.

Scottish rate of tax
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