Scottish Income Tax
Employers no longer have to submit extensive sampling data in order to prove a bespoke rate is required.
From April 2018 employers will not be required to retain documents where reimbursement by established and agreed scale rates is used. COPYRIGHT © 2021 THE CHARTERED INSTITUTE OF PAYROLL PROFESSIONALS SCOTTISH INCOME TAX Scottish variable rate (SVR) and SRIT (Scottish Rate of Income Tax) Legislation to create the Scottish Parliament, The Scotland Bill 1998, included provision for variation to the United Kingdom standard rate of taxation by a factor of +/- 3% (in 0.5% steps) know as Scottish Variable Rate (SVR). This was repealed by the Scotland Act 2012 and that provides from 2016/17 that the Scottish parliament (regardless of the result of the independence referendum) can deduct 10% from the UK rate of tax and add the SRIT (Scottish Rate of Income Tax). Qualification for deduction at the SRIT is based on location rather than citizenship. Where 50% of the year or more is spent in Scotland, the rate will apply - 50% being assessed on the number of days (part of a day constituting a full day for this purpose) spent in Scotland. The rate will be applicable to earnings wherever payroll is administered throughout the United Kingdom. HMRC separately notified all Scottish taxpayers and allocating S prefix codes, issued notification forms P2 to Scottish employees and P6 to employers and provided employers affected with clearly identifiable SRIT Tax Tables. The code prefix S enables HMRC to identify deductions at the variable rate for allocation purposes from employers’ FPS returns. The UK government continues to set initial rates, thresholds and allowances with the UK personal allowance applying to all Scottish taxpayers. From 6th April 2016 the Scottish parliament elected to replace a 10% reduction in the basic rates of tax in rUK with a new 10% Scottish Rate of Income Tax. From 6th April 2017 the Scottish parliament elected to retain the 10% SRIT, for a second year, however it determined not to adopt the increase in the higher rate threshold to £45,000 as implemented in rUK. In Scotland the threshold was frozen at £43,000. No printing, copying or reproduction permitted.
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