Scottish Income Tax Rate Expected in Autumn Budget

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By Molly Ward

Sept. 17—The Scottish government is expected to announce the proposed Scottish income tax rate for the tax year 2016-17, which begins in April 2016, in its autumn 2015 draft budget, the United Kingdom HM Revenue and Customs (HMRC) said in Sept. 15 guidance.

The new rate is to be set by the Scottish parliament, so Scottish taxpayers may pay a different rate of income tax than the rest of the United Kingdom. Beginning April 6, 2016, Scottish taxpayers will have their tax codes begin with the letter ‘S,’ HMRC said.

HMRC will collect the tax on behalf of the Scottish government and notify employers of the tax code applicable to their employees. The introduction of the Scottish rate of income tax will not affect National Insurance contributions.

Some of the income tax collected under the Scottish rate will fund the Scottish government and the rest will fund the U.K. government, HMRC said.

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The guidance can be found at

More information on payroll issues in the U.K. can be found in the U.K. country primer.

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