Scottish Tax rates

If you run a payroll and you have an employee who is Scottish watch out!

A Scottish taxpayer is defined by where their main residence is, but at present HMRC is taking this to be the taxpayer’s correspondence address as reported to them.

If employees move they should update their address details with HMRC without delay. If Scottish tax rates apply to the individual the tax code will have an S in it. In 2017/18 the basic rate tax band will be £31,500 as against £33,500 in England, Wales and Northern Ireland. However this will not apply for savings income, dividend income or capital gains tax!

Also as NIC is not a devolved tax Scottish taxpayers will pay a 52% marginal rate on employment income between £43,000 and £45,000.