P60 to no longer show separate Scottish Rate of Income Tax

The Chartered Institute of Payroll Professionals (CIPP) has confirmed from HM Revenue and Customs (HMRC) that P60’s will no longer need to include the Scottish Rate of Income Tax separately from 2016.

Previously, HMRC had requested that P60s would need to show separately the Scottish Rate of Income Tax proportion on the ‘In This Employment’ section from April 2016.

But since the initial dialogue, HMRC and the Scottish Government have listened to the concerns and issues raised by employers and software developers on how best to implement these changes – especially given the potential of extended income tax authority within the Scotland Bill.

The decision was subsequently taken to no longer mandate the inclusion of the Scottish Rate of Income Tax on the P60 from April 2016; but P60s should still show a Scottish Tax Code where appropriate.

HMRC will display the Scottish Rate proportion separately on an individual’s Annual Tax Summary from the 2016-17 tax year onwards.

Although no requirement is necessary to display the Scottish Rate separately on payslips, HMRC has intimated it will continue to work closely with employers on how best to give employees the best possible visibility and comprehension of the Scottish Rate of Income Tax.

Karen Thomson, associate director of policy, research and strategic visibility, CIPP, said: “We are delighted that this requirement has been overturned, it is one less administrative burden for payroll professionals to deal with.

“We would like to thank all those who contributed to the various surveys and discussions on this subject as without your input, our pleas for change have little substance.

“It is these types of turnarounds from Government that prove just how invaluable member collaboration and the CIPP’s engagement with government departments are.”

Last updated: 16th June 2015