Scottish rate of income tax

Latest news issued from HMRC for  residents living in Scotland                  

The Scottish rate of Income Tax will come into effect from 6 April 2016. On 2 December 2015, HMRC will start to contact customers living in Scotland where records show that this is their main address, to inform them they have been identified as being a Scottish taxpayer.

You can find updates and all the latest information on the Scottish rate of Income Tax news page.

What you need to know 

  • Scottish taxpayers will have a tax code prefixed by an ‘S’. Scottish tax codes will be issued as part of the annual coding routines to employers, so the correct rate of income tax can be deducted based on each individual’s taxpayer status.
  • If any of your employees live in Scotland you will be sent the ‘S’ Tax code in the annual coding run.  

  • You must ensure that your payroll software is up to date and able to apply the new ‘S’ codes. 

  • You will need to apply the new ‘S’ tax code to all employees identified as being a Scottish taxpayer even if the rates of Income Tax in Scotland remain the same as the rest of the UK.
  • There will be no change to the way you report or make payments for income tax to HMRC, other than applying the ‘S’ tax code to Scottish taxpayer employees. 

  • You do not need to take any action to identify whether any of your employees are Scottish taxpayers, as this will be done by HMRC using the address information held on  record.
  • Please tell HMRC if your  address changes, to enable them to correctly identify any Scottish taxpayers and ensure they pay the right amount of tax.
  • The tax tables will be updated on GOV.UK in February 2016 to show the Scottish rates of Income Tax for basic, additional and higher rate taxpayers.

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