SAM101380 - Records: maintain taxpayer record: Scottish income tax
Background
Definition of a Scottish customer
Exceptions
Terminology
Background
Scottish income tax was introduced by the Scotland Act 2012. It is charged on the non-savings and non-dividend income of those defined as Scottish customers and started in April 2016.
The definition of a Scottish customer is focused on where an individual lives, or resides, in the course of a tax year. Scottish customer status applies for a whole tax year. It is not possible to be a Scottish customer for part of a tax year therefore it is important that when creating a new SA record the ‘Base address effective from’ box is completed. Likewise when recording a change of address, the date of the change must be recorded. Further information on this subject can be found at SAM101270 ‘Maintaining addresses’ and how to record the change in the Customer Business Guide (TBS) at TBSG055 ‘Enter or amend address’.
For tax years 2016-2017 onwards, the Scottish customer (STp) status can be seen in the `Tax year overview’ screen in `View L & P’ but the Customer Business service (TBS) should be used to view the Scottish Main place of residence status (SMPR) start and end dates.
Definition of a Scottish customer
For an individual to be a Scottish customer, they must be resident in the UK for tax purposes and have their sole or main place of residence in Scotland.
Individuals who have more than one place of residence in the UK need to determine which of these has been their main place of residence for the longest period in a tax year – if this is in Scotland, they are a Scottish customer. For example, if an individual with a single place of residence moves house into, or out of, Scotland part way through a tax year, deciding whether they will be a Scottish customer in that year or not will depend on which house is their main place of residence for the longer amount of time.
Individuals who cannot identify a main place of residence will need to count the days they spend in Scotland and the days they spent in other parts of the UK. For example, if they spend 125 days in Scotland, 120 days in Wales and 120 days in England/Northern Ireland, as they have spent the most time in Scotland, they will be a Scottish customer. Where this applies, they will be treated as a Scottish customer for the whole year.
Note: Only HMRC can decide an individual’s customer status. An employer cannot make this decision or inform HMRC of an employee’s customer status
Exceptions
There are separate rules which apply to Scottish Parliamentarians. All Scottish parliamentarians will be Scottish customers wherever they live, and an individual is a Scottish Parliamentarian for a tax year if for the whole year, or any part of that year, they are:-
- A Member of Parliament (MP) for a constituency in Scotland
- A Member of the European Parliament (MEP) for Scotland
- A Member of the Scottish Parliament (MSP)
Note: Investment income will be taxed at UK rates regardless of an individual’s status and Charities will claim Gift Aid at the UK basic rate. Higher rate and additional rate Scottish customers will reclaim Gift Aid at the Scottish rates.
Terminology
Term/Word |
Meaning |
|---|---|
Scottish Main Place of Residence (SMPR) |
If Scottish customers reside in Scotland for more than 183 days in a year they will be a Scottish resident and liable to Scottish tax. Where a customer may work in Scotland, and therefore be in Scotland for more than the 183 days per year, they may not necessarily be a Scottish resident. When a customer has more than one home residency, residency will be established by where they are registered for GP’s, dentists and where their family home is. Residency guidance from Central Policy will also provide supplementary information |
Address Effective from date |
This is an important element from 6 April 2016 and will establish the point where a customer becomes a Scottish customer dependent on the date they class their main place of residence as a Scottish address |
S prefix for tax code |
From April 2016 all Scottish Customers will be identified by an S prefix on their tax code. The notification letter will provide information to customers around this |
Scottish income tax |
The rate that the Scottish Parliament sets. |
Scottish customer (STp) |
Person liable to pay the Scottish rate of income tax |
| Scottish starter rate | 2018-19 onwards - the rate set by the Scottish Government that is below the basic rate. 100% goes to the Scottish Government |
Scottish basic rate |
2016-17 - the UK basic rate of income tax, less ten percentage points, plus the Scottish rate of income tax / 2017-18 onwards - the rate set by the Scottish Government. 100% goes to the Scottish Government |
| Scottish intermediate rate | 2018-19 onwards - the rate set by the Scottish Government that is between the basic rate and the higher rate. 100% goes to the Scottish Government |
Scottish higher rate |
2016-17 - the UK higher rate of income tax, less ten percentage points, plus the Scottish rate of income tax / 2017-18 onwards - the rate set by the Scottish Government. 100% goes to the Scottish Government |
Scottish additional rate |
The UK additional rate of income tax, less ten percentage points, plus the Scottish rate of income tax / 2017-18 onwards - the rate set by the Scottish Government. 100% goes to the Scottish Government |
Scottish main rates |
Collectively, the Scottish basic rate, the Scottish higher rate and the Scottish additional rate of income tax. |
The main rates of income tax |
Collectively, the UK basic rate, the UK higher rate and the UK additional rate of income tax |
Further Scottish Income Tax Powers
The Scotland Act 2012 gave the Scottish Government new powers to apply a rate of income tax paid on non-savings and non-dividend income by Scottish customers from April 2016. The Personal Allowance is set by UK Government.
Scotland Act 2016 give Scotland further income tax powers, so from April 2017 the Scottish Government were able to set its own income tax rates and bands annually. The Scottish Government will receive 100% of Scottish income tax (SIT) collected by HMRC on its behalf.
2024-25 Scottish income tax rates
A new rate was introduced for 2024-25- Advanced rate
|
Scottish income tax rates |
Scottish bands |
|---|---|
|
Scottish Starter Rate - 19% |
£1 up to £2,306* |
|
Basic Rate - 20% |
£2,307 up to £13,991 |
|
Intermediate Rate - 21% |
£13,992 up to £31,092 |
|
Higher Rate - 41% |
£31,093 up to £62,430 |
|
Advanced Rate - 45% |
£62,431 up to £125140 |
|
Top Rate - 46% |
£125,141** and above |
*Assumes in receipt of Personal Allowance
** Personal Allowance is reduced by £1 for every £2 earned over £100,000
2023-24 Scottish income tax rates
|
Scottish income tax rates |
Scottish bands |
|---|---|
|
Scottish Starter Rate - 19% |
£1 up to £2,162* |
|
Basic Rate - 20% |
£2,163 up to £13,118 |
|
Intermediate Rate - 21% |
£13,119 up to £31,092 |
|
Higher Rate - 41% |
£31,093 up to £125,140 |
|
Top Rate - 46% |
£125,141** and above |
2022-23 Scottish income tax rates
|
Scottish income tax rates |
Scottish bands |
|
Scottish Starter Rate - 19% |
£1 up to £2,162* |
|
Basic Rate - 20% |
£2,163 up to £13,118 |
|
Intermediate Rate - 21% |
£13,119 up to £31,092 |
|
Higher Rate - 41% |
£31,093 up to £150,000 |
|
Top Rate - 46% |
£150,001** and above |
2021-22 Scottish income tax rates
|
Scottish income tax rates |
Scottish bands |
|
Scottish Starter Rate - 19% |
£1 up to £2,097* |
|
Basic Rate - 20% |
£2,098 up to £12,726 |
|
Intermediate Rate - 21% |
£12,727 up to £31,092 |
| Higher Rate- 41% | £31,093 up to £150,000 |
| Top Rate - 46% | £150,001** and above |
2020-21 Scottish income tax rates (from 11 May)
|
Scottish income tax rates |
Scottish bands |
|
Scottish Starter Rate - 19% |
£1 up to £2,085* |
|
Basic Rate - 20% |
£2,086 up to £12,658 |
|
Intermediate Rate - 21% |
£12,659 up to £30,930 |
|
Higher Rate - 41% |
£30,931 up to £150,000 |
|
Top Rate - 46% |
£150,001** and above |
2019-20 Scottish income tax rates
|
Scottish income tax rates |
Scottish bands |
|
Scottish Starter Rate - 19% |
£1 up to £2,049* |
|
Basic Rate - 20% |
£2,050 up to £12,444 |
|
Intermediate Rate - 21% |
£12,445 up to £30,930 |
|
Higher Rate - 41% |
£30,931 up to £150,000 |
|
Top Rate - 46% |
£150,001** and above |
2018-19 Scottish income tax rates
Three new rates were introduced for 2018-19 - Starter rate, Higher rate and Top rate.
|
Scottish income tax rates |
Scottish bands |
|---|---|
|
Scottish Starter Rate - 19% |
£1 up to £2,000* |
|
Basic Rate - 20% |
£2,001 up to £12,150 |
|
Intermediate Rate - 21% |
£12,151 up to £31,580 |
|
Higher Rate - 41% |
£31,581 up to £150,000 |
|
Top Rate - 46% |
£150,001** and above |
2017-18 Scottish income tax rates
|
Scottish income tax rates |
Scottish bands |
|---|---|
|
Scottish Basic rate - 20% |
£1 up to £31,500* |
|
Scottish Higher rate - 40% |
£31,501 up to £150,000 |
|
Scottish Additional Higher rate - 45% |
£150,001** and above |