HAVE YOUR corporate clients set up payroll to deal with the impending Scottish rate of income tax? The question is one that advisers must broach with their clients, their accounting peers have warned.
The new rates, which will apply to workers that live in Scotland, will be proposed later this month and apply from 6 April 2016.
While the onus is on HMRC and employees to decide the appropriate tax jurisdiction, employers will need to make sure their payroll software is in order to deal with the change. The taxman will let them know who the Scottish taxpayers will be – and an ‘S’ will be added to the start of their tax code.
Various forms and payslip will need amending, while HMRC’s employer guidance states: “You’ll need to adjust your IT systems to collect the right amount.”
RSM’s head of tax in Scotland, Stephen Hay, has warned that the change will place “important administrative burdens” upon employers.
“All employers with Scottish resident employees – or even a single worker living in Scotland – will still need to be set up to deal with the new regime and have payroll software which can cope with the new codes,” said Hay.
“It is also likely that employers will have to respond to queries from their staff, and deal with the inevitable teething difficulties that the introduction of the new rate will bring – particularly in the event that the Scottish government decides to raise or lower the rate.”
There have been concerns about the Scottish government’s ability to manage the transfer of control.
HMRC is continuing to ramp up the number of raids on premises it carries out as part of criminal investigations, searching 761 properties in the last year
The latest opinions from Accountancy Age on Making Tax Digital, and outline plans to evolve the UK's corporate governance regime
Lord Howard Leigh of Hurley discusses the government’s initiatives to mitigate tax avoidance and evasion
Top 50+50: Demand for tax advisory services remains high, but fee pressure is expected in relation to compliance services
The demand for tax advisory services remains high and this looks to continue; but fee pressure is expected in relation to compliance services as the “Making Tax Digital” initiative is rolled out,