In reaction to today’s Scottish Government Spending Review, during which Finance Secretary John Swinney announced that the first-ever Scottish Rate of Income Tax (SRIT) will be set at 10 per cent, Ian McCall, Tax Partner at Deloitte in Scotland, said:
“The Scottish Government may have decided to remain with the status quo for its SRIT, but there are still important changes which both individuals and businesses need to prepare for ahead of next April.
“As Her Majesty’s Revenue and Customs (HMRC) looks to define those liable to pay the SRIT, individuals should be proactive in making sure that HMRC has up-to-date information about their circumstances – it’s possible that it doesn’t have your most recent address, for example. This can be done through the HMRC website or by phoning the Revenue; employers cannot do this on behalf of their employees.
“For most, it will be obvious whether or not they should be a Scottish Taxpayer based on where they live. However, for those who move to or from Scotland or who don’t necessarily count a single property as their home, it becomes more complicated and they will have to consider their position.
“Being prepared and proactive will be the key for businesses too. Although there wasn’t a change to the effective rate of taxation, employers will also need to make sure their payroll mechanisms and software packages are able to process the new S-code. It’s the responsibility of the employer to make sure everything is in order and all reporting obligations can be adhered to.
“At the same time, businesses should also be ready to help their employees understand the new system and keep them informed as we approach its introduction on April 6, 2016. Individuals are much more likely to direct questions to their employers rather than HMRC, so they need to have communications and advice ready.”