HMRC issues new briefing on Scotland income tax rate

HMRC issues new briefing on Scotland income tax rate

HM Revenue and Customs (HMRC) has issued a new briefing outlining the details surrounding the new system, which comes in from April 2016 regarding Scottish income tax.

From next April, the Scottish Parliament will have new powers allowing it to set a separate rate of income tax, which will then fund spending by the Scottish government.

Scottish government

As of 6 April 2016, people who live in Scotland will pay a proportion of their income tax directly to the Scottish government.

This will mean a reduction of 10% for all the main rates of income tax for Scottish taxpayers, with this being replaced by the Scottish Rate of Income Tax.

The new levy has not had a rate confirmed yet, so whether or not taxpayers north of the border will be better off remains to be seen.

The Scottish Rate of Income Tax will not apply to income from savings interest or to income from share dividends. The rates for these sources of income will remain the same for all UK taxpayers.

Income tax thresholds and allowances are also unaffected and will continue to be set by Westminster.


A 'Scottish' taxpayer will be based on where an individual lives in the course of a tax year and will apply for the whole year period.

Potential Scottish taxpayers will get a letter from HMRC asking them to confirm that the address held in their records is correct, and for employees the new changes will be applied via PAYE. Self Assessment returnees will be asked to confirm whether they are a Scottish taxpayer in the 2016 to 2017 filing.

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