On 16 December 2015 the UK updated its guidance on the Scottish rate of income tax. From 6 April 2016 people living in Scotland are to pay the Scottish rate of income tax at a rate of 10%. However the same overall rate of income tax will be paid as people in other parts of the UK.
For people whose income is in the basic rate band of tax the 10% Scottish income tax will be paid to Scotland and the UK rate paid in Scotland will be another 10%, so the total tax rate paid will be 20%. Similar adjustments are made to the UK rate for the higher and additional rate bands so taxpayers in these income bands will also pay the same overall rate of tax as taxpayers in the rest of the UK.
The requirement to pay Scottish income tax will be based on where an individual lives and HMRC will be contacting individuals who should be paying the Scottish income tax. From 6 April 2016 individuals who are employed or receiving a pension will be given a tax code beginning with the letter S if they are paying the Scottish income tax, so their employers or pension providers can deduct tax appropriately.
