Financial Planners alerted to Scottish tax changes
Financial Planners are being alerted to preparations for the introduction of the Scottish Rate of Income Tax, which is set to affect nearly 3 million people.
From April 2016, the new Scottish Rate of Income Tax, set by the Scottish Government, will replace ten pence of all the main rates of income tax for Scottish taxpayers.
HM Revenue and Customs will start sending letters this week to potential Scottish taxpayers as part of the next stage of preparing for the new rate.
Letters will go to around 2.6 million people in Scotland who are expected to be taxpayers in the 2016-17 tax year.
The letters are intended to confirm the accuracy of HMRC’s records of taxpayers who live in Scotland and will pay the new rate.
They will reassure recipients that they don’t need to take any action if the address details HMRC holds for them are correct, officials said.
The Scottish Rate of Income Tax, which will be announced by the Scottish Government on 16 December, comes into effect on 6 April 2016 and will be paid by UK taxpayers who live in Scotland, regardless of where they work.
Those paying the new rate will see their tax code prefixed by an ‘S’ and their income tax will continue to be collected from pay and pensions in the same way as it is now.
Edward Troup, tax assurance commissioner and second permanent secretary at HMRC said: “HMRC is taking the next step towards implementing devolution of tax powers to the Scottish Government. The new tax rate will apply to everyone who lives in Scotland.
“If we’ve got your address right, there’s no need to do anything – the small number who need to change their address details can do so quickly and easily online at www.gov.uk/tell-hmrc-change-of-details.”