Scottis Tax Codes

The Scottish Rate of Income Tax may affect the amount of Income Tax Scottish taxpayers will have to pay. It comes in to force on 6 April 2016. A Scottish taxpayer is someone who lives in Scotland.

HMRC have run articles in their June and October editions of the Employer Bulletin giving general information about the Scottish Rate of Income Tax. Please don’t hesitate to call us if you need any clarification or have any concerns.



What’s New

From 2 December 2015, HMRC has started contacting taxpayers living in Scotland where their records show that this is their main address. This is to inform them that they have been identified as a Scottish taxpayer. The Scottish Government has published its Draft Budget on 16 December 2015. The Draft Budget includes proposals for the Scottish rate of Income Tax.

Being prepared for Scottish Rate of Income Tax – KEY FACTS

  • HMRC are responsible for identifying Scottish taxpayers – not employers.
  • Scottish taxpayers will have a tax code prefixed by an ‘S’. Scottish tax codes will be issued to employers as part of the annual coding routines, so the correct rate of Income Tax can be deducted based on an individual’s taxpayer status.
  • Make sure your payroll providers software is up to date and able to apply the new ‘S’ codes.
  • You must 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 rates in the rest of the UK.
  • There will be no change to the way you report or make payments of Income Tax to HMRC, other than applying the ‘S’ tax code to Scottish taxpayer employees.
  • Scottish taxpayers will be identified via address information that is held by HMRC so actively encourage your employees to update HMRC with address changes at                                           to ensure the tax they pay is accurate.