Does it just apply to companies based in Scotland?
No, if you have employees who live in Scotland you will have to apply the Scottish Rate Income Tax. This applies if their main address is in Scotland and doesn’t apply if they have a second home in Scotland that isn’t their main abode.
What is classed as your main home?
If you have more than one address such as a family home and a flat you use to work even though you may spend more days at the flat near your work, your family home will be classed as your main abode as it contains the majority of your possessions, you have family and social activities based there and you are registered for GP etc at your family home.
What if an employee does not have a Scottish address but spends considerable time working in Scotland i.e. offshore?
If you don’t have a home in Scotland but spend more days working in Scotland than in other parts of the UK you will be classed as a Scottish taxpayer.
If your employees work offshore if this is within 12 nautical miles from Scotland it is classed as being in Scotland.
Will the rate apply for the full year or just the time they spend in Scotland?
If an employee is classed as being a Scottish taxpayer they will have the Scottish tax rate applied for the full year.
How will this be managed within the payroll?
Employees whom this effects will receive a revised tax coding notice which will have a tax suffix of ‘S’ which is the key indicator that informs payroll providers these employees fall under the Scottish tax rates.