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Published on 27 January 2015

Clarifying the scope of the Scottish rate of Income Tax – Technical Note

LITRG has responded to an HMRC consultation on a Technical Note and draft legislation in respect of the Scottish Rate of Income Tax. LITRG notes that while this Technical Note, together with a previous one issued in May 2012, appears to have dealt with all current issues, inevitably further issues will arise, particularly when the Scottish Rate of Income Tax comes into force in April 2016. LITRG calls on HMRC to put in place a mechanism to enable issues to be raised and solved swiftly.

LITRG is concerned that some basic rate taxpayers in receipt of non-savings income from deceased estates and interest in possession trusts will be forced into the self assessment system or face complex PAYE adjustments. The group suggests that a franking system might both assist in reducing complexity for taxpayers and work for HMRC.

A decision has been taken for information about the amount of Scottish tax paid to be shown on the P60 of employees, but not the payslip or form P45. LITRG believes it is important that there is full provision of information to taxpayers, so that they can understand their tax position. The group makes a strong case for the inclusion of information about the Scottish Rate of Income Tax on form P45.

The LITRG response can be found here.

Joanne Walker

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