Living in Scotland and being employed you ought to have seen the letter S in front of your code for some time now. The S indicates you are a Scottish taxpayer and it becomes even more significant with the new Scottish Income Tax rates coming into effect in Scotland from 6 of April.
The question on everyone’s lips is: Will I be paying more or paying less tax? Check your current salary and tax and use the bands detailed below to help.
Scottish Income Tax bands:
| Bands | Band name | Rates (%) |
| Over £11,850*-£13,850 | Starter Rate | 19 |
| Over £13,850-£24,000 | Basic Rate | 20 |
| Over £24,000-£43,430 | Intermediate Rate | 21 |
| Over £43,430-£150,000** | Higher Rate | 41 |
| Above £150,000** | Top Rate | 46 |
* Assumes person is in receipt of the Standard UK Personal Allowance ** Personal Allowance is reduced by £1 for every £2 earned over £100,000 Source http://www.gov.scot/Topics/Government/Finance/scottishapproach/Scottishincometax2018-2019
Remember, the next time you ask for a pay rise it’s worth checking the tax bracket you could fall under.
How do I know if I’m a Scottish tax payer?
May seem like an odd question. On the surface it’s a simple as where your main place of residence is. You work in London and commute home at the weekends to Edinburgh then you fall under Scottish Tax System. However, there’s always some grey areas as some jobs fall in between the cracks. If you are a member of the military service, posted around the world but briefly based in Scotland it could become confusing. In all such cases speak to your payroll department or contact HMRC directly. Get in touch as early as possible to avoid HMRC penalties further down the line.
How are my investments or savings affected?
Another area to consider is if you have investment or savings income. The new Scottish income tax rates do not apply to savings or investment income. That’s why people with some income from those sources face more complexity, although they may have generally lower tax bills.
Finally, a word of caution.
For some of you living in Scotland the S may have not be added because HMRC has you registered as living in the UK, even though your town and postcode are clearly in Scotland. Next pay day, double check your payslip not just for a wishful thinking bonus but check your tax code is correct.
As always with every tax change there’s winners and losers. If you are finding your tax returns increasingly more difficult Bruce Wilson our tax expert can help you.
Get in touch today on 0141 290 0262 or email info@muwca.co.uk