Scottish taxpayers

Posted on 04/03/2016 at 17:07

For those of our clients with Scottish roots, you may be interested to know who will be regarded as a Scottish taxpayer when the Scottish rate of income tax comes into force on 6th April 2016.


To be a Scottish taxpayer, it is first necessary to be a UK resident for tax purposes.  The definition of a Scottish taxpayer will then generally focus on the question of whether an individual has a “close connection” with Scotland or elsewhere in the UK.


The existence of that close connection will usually be determined by where an individual has their place of residence during a tax year.


Individuals who have more than one place of residence will be considered a Scottish taxpayer if their main place of residence is in Scotland for at least as much of the tax year as it is in any other country in the UK.


Residence will be determined by day counting if a taxpayer has no close connection to Scotland or any other part of the UK.


None of the following factors will cause an individual to be a Scottish taxpayer if their place of residence is outside Scotland:


  • national identity – regarding oneself to be Scottish;


  • location of work – working in Scotland;


  • location of income source – receiving a pension or salary from a Scottish entity; or


  • travelling in Scotland – driving a lorry in or frequent work visits to Scotland.


HMRC will contact potential Scottish taxpayers before April 2016 based on the individual’s address. 


They advise that it is the responsibility of the taxpayer, rather than their employer, to notify HMRC if they change address.