Saffery Champness advises Scottish taxpayers not to lose out on extra tax relief

The new Scottish Income Tax rates and bands have some implications, not just for the amount of income tax individuals have to pay, but also for changes to pension tax relief, according to Saffery Champness.

Elaine McInroy, tax specialist and head of the firm’s Edinburgh office, says that intermediate and higher rate taxpayers can claim extra relief on pension contributions and gift aid donations after 6th April, now that the rates will be higher in Scotland.

Ms McInroy said: “Scottish taxpayers, who are now liable to pay 21 per cent tax will be entitled to claim an extra 1 per cent relief and higher rate taxpayers at the Scottish tax rates of 41 per cent or 46 per cent will also be able to claim additional relief. This may be done through either a tax return or coding notice. As the Scottish intermediate, higher and top rate tax rates will be higher in the next tax year then more tax relief will be available if pension contributions or gift aid payments are made after 6 April.

“Those who pay 19 per cent will have had too much relief, so they are not due any more. In relation to pensions, HMRC have said this need not been repaid and I assume the cost of this will come out of Scottish tax receipts. It is not clear at this stage if a similar position will be taken on gift aid donations.”

As the onus on reclaiming additional tax relief will be on the individual, McInroy recommends seeking advice from an expert.