HMRC to start sending out Scottish taxpayer notification letters
HMRC have indicated that Scottish taxpayer notification letters will start to arrive on taxpayers’ doormats on Wednesday 2 December. Individuals will receive a letter if HMRC have reason to believe they are a Scottish taxpayer under the rules for the Scottish Rate of Income Tax (SRIT).
HMRC will normally base their belief on the address records they hold for an individual.
The SRIT will apply to the non-savings, non-dividend income of Scottish taxpayers from 6 April 2016. The Scottish Government will announce the rate of the SRIT on Wednesday 16 December, the date of the Scottish Draft Budget; this will help to determine the rates of income tax a Scottish taxpayer pays on their non-savings, non-dividend income.
The definition of a Scottish taxpayer is contained in law and is based around where an individual lives during the course of a tax year. For most individuals, the question of whether or not they are a Scottish taxpayer will be straightforward. There is more information on Scottish taxpayer status in our ‘tax essentials guide’.
What if I receive a letter?
If you pay tax under the PAYE system, HMRC will make the initial decision as to whether or not you are a Scottish taxpayer. If HMRC think you are a Scottish taxpayer, you will receive a notification letter.
If you pay tax under self assessment, you must decide whether or not you are a Scottish taxpayer, and indicate this in your tax return (tax year 2016/17 onwards). You may still receive a notification letter from HMRC.
If you disagree with HMRC, the letter contains information on what action to take. If you agree with HMRC, you do not need to take any further action.
What if I do not receive a letter?
If you pay tax under the PAYE system and you do not receive a notification letter, but you think that you are a Scottish taxpayer, you should contact HMRC.
If you pay tax under self assessment, you must decide whether or not you are a Scottish taxpayer, and indicate this in your tax return (tax year 2016/17 onwards).
In all cases, it is important to make sure that HMRC have your correct and up-to-date address. This is not the only factor in determining Scottish taxpayer, but it will be decisive in many cases.