Who is a Scottish taxpayer?

The Scottish rate of income (SRIT) is payable on Scottish taxpayers’ non-savings and non-dividend income. This means that Scottish taxpayers who also have savings and dividend income need to consider the UK and Scottish rates when calculating their income tax bills.

Scottish taxpayer status applies for a whole tax year. It is impossible to be a Scottish taxpayer for part of a tax year. The definition of a Scottish taxpayer generally focuses on whether the taxpayer has a ‘close connection’ with Scotland or elsewhere in the UK. The idea of being treated as a Scottish taxpayer is not based on nationalist identity, work location or source of a person’s income, e.g., receiving a salary from a Scottish business.

For the vast majority of individuals, the question of whether or not they are defined as a Scottish taxpayer is a simple one – they either live in Scotland and are a Scottish taxpayer or live elsewhere in the UK and are not a Scottish taxpayer.

More specifically, an individual will generally be defined as a Scottish taxpayer if they satisfy any of the following tests:

1. They are Scottish Parliamentarians.
2. They have a ‘close connection’ to Scotland through either:
i) having only a single ‘place of residence, which is in Scotland; or
ii) where they have more than one place of residence, having their ‘principal place of residence in Scotland for at least as much of the tax year as it has been in any other part of the UK.
3. Where no ‘close connection’ to Scotland (or any other part of the UK) exists (though it is impossible to identify any residence or a primary residence), the place of living will be decided by day counting.

There will always be cases where a taxpayer’s status is unclear. HMRC’s technical guidance looks at relevant case law and includes examples where a taxpayer has more than one residence on either side of the border.