Devolution has seen real change to the UK tax system with the introduction of tax raising powers for the Scottish government and the introduction of the Scottish Rate of Income Tax (SRIT). Saffery Champness partner Elaine McInroy considers the key issues for employers and employees defined as Scottish taxpayers
The Scottish Rate of Income Tax (SRIT) came into force on 6 April 2016 and only applies to individuals. Companies and trusts are excluded.
You will be subject to the SRIT if you are a ‘Scottish taxpayer’ in the tax year. It is thought that around 2.49m people will fall into this definition. It is worth noting that you must be UK tax resident in the first instance. It is also important to note that the test is not about where you work but where you live and for most people the position will be clear. If your only home is in Scotland or you are a member of any of the various parliaments for Scotland, you are a Scottish taxpayer.
The position is less clear if you have multiple homes in different parts of the UK or indeed if you move part way through the year. In these circumstances you will be resident in the part of the UK where your closest connection is for the year. Determining this will consider many factors including the days spent in Scotland versus the rest of the UK and where your main residence is considered to be.
