So are we all moving to Scotland in April?

[DaveB]

Scottish Rate of Income Tax starts 2016

The Scottish rate of Income Tax will come into effect from 6 April 2016.

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 our records.

Please encourage your employees to tell HMRC if their address changes, to enable us 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.

On 2 December 2015, HMRC will start to contact customers living in Scotland where our records show that this is their main address, to inform them they have been identified as being a Scottish taxpayer.

What do we reckon, will the Scots set a lower tax rate than the rest of the UK? If they do, would it be enough to make it worthwhile moving there?

[DimPrawn]

If tax rate was zero, I'd still not want to set foot there. Socialist hell hole.

[WTFH]

Scottish Rate of Income Tax starts 2016



What do we reckon, will the Scots set a lower tax rate than the rest of the UK? If they do, would it be enough to make it worthwhile moving there?

They've had the ability to adjust tax levels in Scotland for a few years, but never have. Why would they change now? (unless they are doing it to increase the likelihood of a "yes" vote in the next independence vote (which will be the last, just like the last one was, unless it's a no, in which case it will just be one along the way)

[d000hg]

a)The SNP aren't really socialists
b)Scotland is stunning, who cares if the people in charge are socialists?


More interestingly, does this have any IR35 and/or dividend tax implications since those are linked to income tax? Are Scotland able to move the bands, or just change the tax rates at the pre-existing thresholds?

[DaveB]

They've had the ability to adjust tax levels in Scotland for a few years, but never have. Why would they change now? (unless they are doing it to increase the likelihood of a "yes" vote in the next independence vote (which will be the last, just like the last one was, unless it's a no, in which case it will just be one along the way)

The legislation was passed a while back, but only comes into affect from April next year. This is specific to Income Tax rates.

[WTFH]

The legislation was passed a while back, but only comes into affect from April next year. This is specific to Income Tax rates.

Ah, I thought they had legislation since 2007. Guess I was wrong.

[MarillionFan]

Scottish Rate of Income Tax starts 2016



What do we reckon, will the Scots set a lower tax rate than the rest of the UK? If they do, would it be enough to make it worthwhile moving there?

What are they planning to do with BTLS? Might buy a second home up there but it as my primary resident to avoid tax.

[DaveB]

a)The SNP aren't really socialists
b)Scotland is stunning, who cares if the people in charge are socialists?


More interestingly, does this have any IR35 and/or dividend tax implications since those are linked to income tax? Are Scotland able to move the bands, or just change the tax rates at the pre-existing thresholds?

As I understand it, the Bands stay the same but the tax rates can vary. The new rules effectively lop 10p off of all the tax rates and the Scottish Parliament are then free to change them from there. They could leave it at that, so making the rates 10%, 30% etc. or add more to make it 25% 45% etc or anything inbetween.

[FatLazyContractor]

Depends. Are the Scottish lasses showing us a bit more skin?

[FatLazyContractor]

What are they planning to do with BTLS? Might buy a second home up there but it as my primary resident to avoid tax.

You should move there. I think you will feel at home with the sub-20 IQed Scots