Scottish taxes from 6 April 2016

From 6 April 2016, the new Scottish Income Tax will come into force which will affect those individuals living in Scotland and employers who have employees living in Scotland.

How it works? 

From 6 April 2016 individuals will pay the Scottish rate of Income Tax if they live in Scotland.  This means that some of the Income Tax collected will be paid to the Scottish Government.  It will apply to wages, pensions and most other taxable income.  

The Scottish rate of Income Tax is 10% but this is not an additional charge, it is the amount of tax that will be collected by HMRC and then transferred to the Scottish government:-

UK rate for England, Wales and Northern Ireland

Income band

UK rate paid in Scotland

Scottish rate

Total rate for Scottish taxpayers

Basic rate 20%

£11,001 - £43,000




Higher rate 40%

£43,001 - £150,000




Additional rate 45%

Over £150,000




At present there are no powers to vary the tax bands but it is possible that this will change.

Who pays the Scottish rate?

The Scottish rate will be payable if you live in Scotland.  Special rules apply:-

-          if you move to or from Scotland.

-          if you own more than one residence and one is in Scotland and the other is elsewhere in the UK.

-          If you are a mobile worker and don’t have a permanent home eg an oil worker

HMRC have written to all “Scottish taxpayers” informing them of the change; for taxpayers who fall within self assessment there will be a disclosure required in their self assessment tax returns. 


Individuals must ensure that they tell HMRC if they move to or from Scotland.   

All employers must make sure that their payroll software is updated to take into account the forthcoming changes. Indeed employers should also be aware that the new taxes may mean that they have to respond to queries from employees in respect of these.

Regardless of whether you are Scottish or not – if you live in Scotland you will pay Scottish income tax.

If you wish to discuss matters further, please make contact with a member of our tax team on the following numbers:

Darlington – 01325 349700
Durham – 0191 3842244
York – 01904 784400