We have an excellent relationship with AAB formed over 7+ years. Their accounts and tax compliance services are thorough and efficient, and the specialist tax planning advice we have received has been first class.
Stanley & Evelyn Morrice
Local Tax Accountants in Scotland
Taxes and pension relief for Scottish Taxpayers differ from the rest of the UK, with a more complex structure. Our local tax accountants can confirm whether you are a Scottish Taxpayer and advise on how to be tax-efficient and compliant.
Jill Walker
Private Client Partner
Who we can help
- ENTREPRENEURS
- HIGH NET WORTH INDIVIDUALS
- INTERNATIONAL PRIVATE CLIENTS
How we can help
- PERSONAL TAX
- TAX COMPLIANCE
- PROPERTY TAX
- INTERNATIONAL TAX
- TAX RESIDENCE AND DOMICILE
- PROPERTY TAX
HOW SCOTTISH TAX DIFFERS
Find out more from local tax accountantsScottish income tax came into force on 6 April 2017, with a five-band structure made up of starter, intermediate, basic, higher and top tax rates. This applies to earnings, rental income, pensions and most other taxable income. However, Scottish taxpayers will continue to pay the same as the rest of the UK on dividends and savings income.
Our local tax accountants can help you navigate these complexities and assist with reviewing Scottish Tax coding notifications, claiming additional tax relief in respect of pension contributions and advising gift aid and marriage allowance tax savings
ARE YOU A SCOTTISH TAXPAYER?
First, our local tax accountants will identify your residency status to determine if you meet the relevant criteria to be considered a Scottish Taxpayer. This depends on where you live for a complete tax year, as defined by the UK Statutory Residence Test. Generally, you can’t be a Scottish taxpayer for part of the year and a non-Scottish taxpayer for the rest, although if you live outside the UK entirely for part of the year, you may be entitled to split-year treatment.
At its simplest definition, if you live in Scotland, you’re a Scottish taxpayer. If you’re employed and taxed under PAYE, HMRC will decide for you (although you can appeal). Your PAYE code will have an S prefix. If you pay tax via Self-Assessment, you’ll have to decide whether or not you’re a Scottish taxpayer.
I have been a personal tax client of AAB for a number of years and in that time they have guided me through the tax return process and provided me with specialist advice relating to my non-resident tax position.
Peter Williams
AAB recently helped my husband and I with appeals to both HMRC and the Norwegian tax authorities. They constantly kept us up to date with progress and were persistent in chasing up both authorities for refunds for us.
Melanie McEvoy
LOCAL TAX ACCOUNTANTS THAT MAKE IT CLEAR FOR YOU
As you can see, where you live during the tax year, and for how long, is a determining factor. However, there are special rules if you serve in the UK Armed Forces, which are designed to make sure you don’t pay any more tax than others earning the same income but in a different part of the UK.
While the rules are ostensibly the same for students, it’s likely you’ll spend part of your time in rented accommodation or Halls of Residence where you’re studying and the rest of the time in your parents’ house. But even if you spend most of your time where you’re studying, it might not be the place with your closest connection, according to HMRC rules.
Our local tax accountants will discuss your situation with you, and together we can work out if your closest connection is with Scotland or if you spend more time in Scotland than anywhere else, so we can ascertain if you definitely are a Scottish taxpayer. This includes if you’ve relocated to Scotland during the tax year.
WHAT ARE THE TAX RATES FOR SCOTTISH TAXPAYERS?
As mentioned above, there are five tax bands with increasing tax rates. The personal allowance is the same, and generally, the tax rate is 1% higher in Scotland than the rest of the UK.
Your National Insurance contribution rates are currently in line with the rest of the UK, and if you are self-employed, you will need to pay your NI contribution through your self-assessment.
If you make contributions to your pension, you’ll receive tax relief on them up to the amount you earn each year. If you have a personal pension, your pension provider applies tax relief at the Basic rate, so if you’re an Intermediate, Higher or Top rate taxpayer, you’ll need to claim the extra tax relief from HMRC.
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