2nd December 2015 at 4:24pm
Two sets of letters are going out from government departments over the next few weeks which we wanted to make you aware of.
For anyone who’s requested a State Pension Statement, you’ll be receiving information from the Department for Work and Pensions (DWP). And HM Revenue and Customs (HMRC) is contacting individuals they believe to be a Scottish tax resident.
Read on for the details…
The Scottish rate of Income Tax
A new Scottish Rate will be introduced from 6 April 2016.
The Scottish rate of Income Tax will only be payable by Scottish taxpayers and HMRC will determine whether or not you’re a Scottish taxpayer based on where your main place of residence is.
You don’t need take any action at the moment as HMRC is writing to those they believe to be a Scottish taxpayer.
The Scottish rate of Income Tax was introduced in the Scotland Act 2012. And while the Scottish Parliament will have the power to set the Scottish Rate of Income tax, HMRC will continue to be responsible for its collection and management.
So in future, some of your Income Tax will now be paid to the Scottish Government. This is a change from the current system, where all Income Tax is paid to the UK.
The Scottish Government is expected to announce the proposed Scottish rate of Income Tax for the tax year 2016 to 2017 in its 2015 draft budget.
The letter you’ll be receiving will be able to go into more detail on what’s happening and how to find out more information, and these have started going out this week – so you can expect it soon.
State Pension Statements
The State pension will also be changing for people who reach State Pension age after 5 April 2016. This is men born after 5 April 1951 and women born after 5 April 1953.
The current State Pension is complicated; making it difficult to estimate how much you’ll receive until you’re closer to State Pension age.
With the new flat rate State Pension, it’s hoped people will have a far better understanding, and from a much younger age, how much they’ll get. This in turn should provide them a better base for their saving and retirement planning.
If you’ve requested a State Pension Statement then you’ll soon be receiving information from The Department for Work and Pensions (DWP) about your entitlement under the new State Pension.
The information in this blog or any response to comments should not be regarded as financial advice and is based on our understanding in December 2015.