I was just reading Melville and something that I had not thought about before jumped out at me as I was reading.
To quote :
"Employers south of the border will be required to apply the Scottish rate to any Scottish employee's they may have".
Now, call me dumb (but bring friends, lol) but I had just thought of this as something applicable north of the border and of no concern to us.
I just had a look at how 12pay handle this and it seems that once we add the new S prefix in front of the tax code of any Scotish employees that we may look after it knows how to handle them.
I assume that other software will work in the same way and all of it will be updated by the time this cuts in at the start of April
Seems that the payroll processing changes are at least going to be a lot easier to handle than explaining to one's staff why two employee's doing the same job in the same workplace on the same grades have different take home pay.
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Shaun
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Seems that the payroll processing changes are at least going to be a lot easier to handle than explaining to one's staff why two employee's doing the same job in the same workplace on the same grades have different take home pay.
As this discussion is going to be taken place in England I don't see what the problem is as there no chance whatsoever an employee south of the border is going to be paying any more in tax.
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Isn't the mechanism from April that 10p in the £ is deducted from Scottish workers tax liability and then the Scottish tax applied.
So, at current 20% / 20p in the £ the effect would be the Scottish workers tax is reduced to 10p and then the Scottish tax applied so for example if thats 7p the worker would be on 17% tax and if there were 13p Scottish tax that would be 23% so it could go either way.
I was not indicating that it would necessarily be English workers complaining. Just that there will be disparity in the workplace between people doing the same job, in the same place, at the same time, on the same grade.
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Shaun
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I was not indicating that it would necessarily be English workers complaining. Just that there will be disparity in the workplace between people doing the same job, in the same place, at the same time, on the same grade.
I think this kind of disparity is a potential hot potato for the bigger employers who have offices and staff who work on both sides of the border - the likes of the Banks and Insurance Companies and such who have always had those clearly defined graded roles and wage bandings, with someone working in one office coming out with more than someone in another office, despite doing exactly the same role - just by virtue of geography.
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
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Just reread your post Peasie and realised that my above response was to the mechanics where your post actually seems to indicate that you think that the Scottish tax is only applicable to Scotland.
Thats not how it works.
If you are domiciled in Scotland but work in England you will from April pay Scottish tax so Scottish workers in England will have different take homes to the people that they are working alongside. The same the other way around, if you live in England but work in Scotland then you will pay tax at the English rate.
This is very much a change applicable to both sides of the border that bookkeepers everywhere need to be aware of as whilst for now the rates are to be kept in sync so 10p deducted and 10p added to each tax band I doubt it will stay that way.
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Shaun
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It would make no difference to the pay rates though surely. All employees currently on £30k per year would still be on 30k per year. It's just that the scottish workers will be on a possible different tax rate.
Good morning Shaun
Have I misunderstood something here? I had assumed it would effect an English person as well if they lived in Scotland, but not a Scottish person living in England.
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John
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quite. I know that when working in London there were staff who travelled down from Edinburgh on a Monday morning and went back on a Friday. They will now all have S prefix codes.
There will not actually be any difference to take home in April as Holyrood voted 74 to 35 to keep the rates in line... However, such cannot be confused with the system remaining the same as now. To alter the rates from day one would be something of a political handgrenade but when the time is right the mechanism will from April be in place to vary the tax causing the issues including the associated workplace discontent that it will bring.
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Shaun
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If someone lives in Scotland but works in England they pay tax at the Scottish rate.
If someonelives in England but works in Scotland then they pay tax at the English rate
Your understanding was similar to mine until I read that one line in Melville that made me go and do some digging. Basically I thought that it was just something affecting workers North of the border but thats not the case.
On the English person living in Scotland, yes, it's all down to where you are domiciled as to the tax that you pay.
p.s. amended for spelling... Dimiciled, lol. New word meaning "someone who is stupid to live somewhere".
-- Edited by Shamus on Sunday 20th of March 2016 12:10:59 PM
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Yep. Potentially the Scots get a better deal than the English. I can never see them paying more than the English. Wish I was Scottish, free prescriptions, free uni. If I lived in Carlisle I'd sell up, and move across the border. Still then remaining close to family, work. Win win.
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Isn't the mechanism from April that 10p in the £ is deducted from Scottish workers tax liability and then the Scottish tax applied.
So, at current 20% / 20p in the £ the effect would be the Scottish workers tax is reduced to 10p and then the Scottish tax applied so for example if thats 7p the worker would be on 17% tax and if there were 13p Scottish tax that would be 23% so it could go either way.
I was not indicating that it would necessarily be English workers complaining. Just that there will be disparity in the workplace between people doing the same job, in the same place, at the same time, on the same grade.
The 10% is the amount of tax that goes to the Scottish Government of the total tax.
So currently it is
10% + 10% = 20%
10% + 30% = 40%
10% + 35% = 45%
There will be no difference just now. But when there isn't a Scottish election to be won, the upper threshold won't be extended. A 50% band may be introduced. My point is I doubt anyone living in England will be worse off than someone in Scotland. So it won't be English workers complaining, it will be the Scottish based workers, working in England.
EDITED - because I can't add up.
-- Edited by Peasie on Sunday 20th of March 2016 05:50:57 PM
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