The Scottish Government have confirmed the new Scottish Income Tax rates to apply for the 2018 to 2019 tax year for people who live in Scotland. 

These are different to the rest of the UK:

UK rates and bands for 2018/19

*Personal allowance £11,850

Bands

Band name

Rates (%)

£11,851*–£46,350

Basic Rate

20

£46,351–£150,000

Higher Rate

40

Above £150,000

Top Rate

45

 

Scottish rates and bands for 2018/19

*Personal allowance £11,850

Bands

Band name

Rates (%)

£11,851*–£13,850

Starter Rate

19

£13,851–£24,000

Basic Rate

20

£24,001–£43,430

Intermediate Rate

21

£43,431–£150,000

Higher Rate

41

Above £150,000

Top Rate

46

 

HMRC notify us which of our existing customers with pension plans, are Scottish or UK tax payers, every January. This can change each year if you move to or from Scotland.  

Once the tax regime is set for a tax year, we cannot change it again until the next tax year.

New customers taking out a pension product will be identified as Scottish or rest of UK tax payers as part of the new business process and HMRC have provided a lookup service so we can validate the tax regime provided to us by the customer. 

We will continue to apply tax relief to your policy at the basic rate of 20%, irrespective of whether you live in Scotland or the rest of the UK.

Scottish customers in the Starter rate band of 19%, will receive tax relief at 20% and HMRC won’t ask you to repay the difference.

Intermediate, Higher and Top rate payers also receive tax relief at 20%, but are entitled to additional relief which can be claimed from HMRC if you don’t already complete Self-Assessment returns, or via a Self-Assessment tax return if you do.