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Employment tax updates: January 2016

Changes to the Scottish income tax system mean that all Scottish taxpayers should be receiving HMRC notification of their new 'S' code status, advisory fuel rates, a review of income tax and NICs, and preparing for the national living wage. By Jackie Hall, partner, RSM

Scottish taxpayers sent S codes

HMRC has started issuing emails to employers reminding them that their 2016/17 payroll software will need to be able to cope with PAYE tax codes starting with the letter ‘S’. This prefix indicates that HMRC regards the individual as a Scottish taxpayer.

The effect of this is that, if the Scottish Rate of Income Tax (SRIT) differs from the rest of the UK when it comes into force on 6 April, employers will be able to tell which employees should pay the new rate.

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