An update to correct tax tables and rates
In our newsletter on 9 February 2017, we explained the new 40% threshold for Scottish residents would be set at £43,000, rather than £45,000 for people living in the rest of the UK, and those who live outside of the UK but who are subject to UK tax.
The Scottish Budget has now been passed, so the Scottish tax bands are fixed for 2017/18. HMRC has also corrected its publication: P9X (2017) which sets out the PAYE codes which should be used from 6 April 2017.
The Scottish tax bands do not apply for savings allowances, dividend income, tax-free childcare vouchers, or capital gains. To work out the levels of those allowances or tax rates, you must carry out a parallel tax computation for the taxpayer, using the tax bands for the rest of the UK. This is particularly important for employers who provide childcare vouchers as they must estimate the employee’s income level at the start of the tax year to determine how much of the vouchers provided should be treated as tax free.
Note the marriage allowance, which can only be claimed when neither spouse/civil partner pays tax at more than 20%, is devolved. Married couples/civil partners who live in Scotland will loss the ability to claim the marriage allowance at a lower income level than couples in the rest of the UK, from 6 April 2017.
Advisory fuel rates
These rates were updated on 23 February 2017 for business journeys taken from 1 March 2017. If you printed out the new tables on that day, go back and check, as the rates were corrected on 24 February 2017. The mileage rate for large petrol cars is 22p/mile not 20p.
Written by the Tax Advice Network