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Scottish Rate of Income Tax – 6 months to go! 20 October 2015
Article from HMRC Employer Bulletin 56 :
The Scottish Rate of Income Tax (SRIT) is the amount of income tax Scottish taxpayers will have to pay and will come in to force on 6 April 2016.
We ran an article in the June edition of the Employer Bulletin giving you some general information about Scottish Rate of Income Tax and said we would keep you updated with progress. The following information gives you the current position in terms of payroll procedures.
Payment after leaving
There are no changes to this process as a result of the Scottish Rate of Income Tax. If one of your employees is a Scottish taxpayer and on a ‘0T’ code, then the working assumption is that it will be prefixed by an ‘S’. 0T tax code is currently applied to those customers who receive a payment after leaving so it will depend upon what type of tax code was in operation at the time of leaving;
– if it was a rest of the UK tax code (e.g. 1000L), ‘0T’ would be applied – if it was a Scottish tax code (e.g. S1000L) ‘S0T’ would be applied.
Reporting this through RTI will be done in exactly the same way as it is now: where you have to pay a person after already giving them a P45, show the original date of leaving on the FPS, completing the “Payment After Leaving” indicator. A further P45 should not be issued (an employer will still however need to provide documentary evidence of the payment).
If there is any change of address subsequently that might change this then it will be picked up and any adjustments made through any new employment or reconciliation after the end of the tax year.
Payroll Software Developers
The information relating to Scottish Rate of Income Tax has been included in the latest technical packs for Real Time Information, internet submissions and Real Time Information, Electronic Data Interchange published on GOV.UK.
The changes for Scottish Rate of Income Tax are as follows:
The ‘SVR’ Field has been renamed ‘Tax Regime’ Tax Regime will incorporate 1 alpha character ‘S’ This will be concatenated (bundled together) to show S1060L.
For more information see our guidance on Scottish Rate of Income Tax calculations: developer update and test data
Tax Tables
The existing tables will be updated to show the Scottish Rates of Income Tax (basic, additional, higher rates).
PAYE Settlement Agreements (PSA)
Employers will need to account for both rest of the UK and Scottish Rates of Income Tax in relation to PSAs. This means employers will need to identify employees chargeable at the rest of the UK basic/higher/additional rates and also at the Scottish basic/higher/additional rates as part of making their PSA calculation. Further guidance will be made available on GOV.UK.
Scottish Rate of Income Tax calculations
For transparency the Scottish Rate of Income Tax will be visible on Annual tax summaries, HMRC calculators and within the digital Personal Tax Account. Further information will be made available on GOV.UK.
Pension schemes operating PAYE
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