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Scottish Rate of Income Tax (SRIT) unchanged at 10p share

In a major overhaul of the tax system for Scottish resident taxpayers, Scotland’s finance minister John Swinney has set out plans to set the Scottish Rate of Income Tax (SRIT) at 10%, effectively retaining the status quo in terms of wider UK rates, but creating a new 'S' tax code and additional PAYE compliance issues for business and individual taxpayers, while second home owners face a 3% surcharge on stamp duty costs, reports Sara White

This means that Scottish resident taxpayers will pay the same as rest of UK taxpayers across all rates with 10% of the tax take being allocated to Scotland. However, this will create a raft of additional PAYE red tape for any business with employees resident in Scotland regardless of the location of the company headquarters.

Already individual Scottish taxpayers have been contacted about the changes to their tax code, with an ‘S’ prefix for all resident taxpayers, regardless of the location of their employer. This means that a Scot could work in Newcastle but live in Edinburgh, hence would be classified as a Scottish ‘S’ code taxpayer.

Delivering the Draft Budget 2016-17 at the Scottish parliament, Swinney said: ‘I hope that from 2017-18 this government will have more flexibility to set tax rates – we will set out longer term plans for Scottish tax plans in March before the dissolution of parliament.’

Sco

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