Are you going to be a new Scottish Taxpayer?

29 October 2015

The Scottish

It sounds like a silly question, as surely you either are a Scottish taxpayer or are not. However, HMRC has just published new guidance for people who might or who might not be Scottish and who need help working it out.

Of course, the guidance isn't just for nationality purposes, but is rather to determine who is liable to pay the new Scottish rate of income tax. For those of you currently scratching your heads, one of the things that came out of the devolution battle was the fact that Scotland would be allowed to levy it's own rate of income tax (even though it has atually had this power in theory since 2012).

So how do you know if you're a Scottish taxpayer or not. Apparently it's more than a feeling as HMRC state clearly that "none of the following will make you a Scottish taxpayer:

national identity – you regard yourself as being Scottish

location of work – you work in Scotland

you receive a salary or pension from a Scottish employer or pension provider

you travel in Scotland – for example, driving a lorry in, or frequent work visits to Scotland"

Generally you are a Scottish taxpayer if you live in Scotland. If you only have one home, and that is in Scotland, you are a Scottish taxpayer. If you have more than one home, it is a little bit more complicated, but basically you are Scottish in taxpaying terms if you live in Scotland at least as much as you live anywhere else in the UK.

If you have no home, then if you spend more time in Scotland than anywhere else in the UK in terms of day counting, again you are Scottish. The reference to elsewhere in the UK is not because the Government doesn't believe that Scots can own homes in Spain or Tuscany or Bulgaria, rather that if you were spending more time outside the UK than in it, then that would be a UK residence issue, rather than a Scottish issue. You can read the minute detail in the Scotland Act 2012 if you are so inclined.

So, being fiscally Scottish or not is a matter of fact, and if you are Scottish, you will have to pay the Scottish rate of income tax on earnings and pensions (but not savings and dividends) from next April. Except they haven't quite figured out how much that Scottish rate will be just yet...


TOPICS:   Tax   Travel

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