Warning letter from taxman to every home on new levy

LETTERS are to be sent to every home in Scotland warning people to inform tax inspectors if they move house amid fears many are unaware of new tax powers coming into force from April.

The taxman has launched the initiative to raise awareness of the Scottish Rate of Income Tax (SRIT) – a new tax levy based on residency rather than the location where workers earn their wages.

HM Revenue and Customs (HMRC) is to remind Scots households to make sure officials have up-to-date details of their address.

Officials aim to flush out people over the next few weeks living north of the Border who wrongly believe they will not be liable for SRIT.

They will be urged to make contact with HMRC, to try to sort things out ahead of the launch.

Across the UK, a public information campaign will also highlight the new tax and tell employees to let the tax office know if they move to Scotland.

The new levy is a result of the 2009 Calman Commission report on extra powers for the Scottish Parliament, which formed the basis of the 2012 Scotland Act.

The process of creating a new Scottish tax and identifying Scottish taxpayers has delayed the introduction of the new rate until next year.

Fewer than one in 10 Scots want MSPs to increase tax rates when they get control of the new responsibility, according to a new poll.

However, just over one quarter (26 per cent) said that rates should be cut by Holyrood, while two fifths (42 per cent) want income tax levels to stay the same as the rest of the UK.

From April, income tax rates will be reduced by 10p in Scotland.

The Scottish Government will then have the ability to set its own rates.

The system is designed to force MSPs to raise more of the money than they spend, with advocates saying the move will make Holyrood more responsible.

The Smith Commission agreement on further powers, the basis of the Scotland Bill at present going through

Westminster, will give MSPs control over an even greater share of income tax.

HRMC warned last month that where employees work is not relevant to whether or not they are a Scottish taxpayer, only where they live.

Concerns have been raised that many people, including so-called Willies (Work in London, Live in Edinburgh), will not realise that they have to pay. A Labour spokesman said: “It’s right that people across the country should be properly informed.

“Over the last year, the UK and Scottish Governments have increased the risk that they may not be able to identify all Scottish taxpayers. As well as a public information campaign, both our govern- ments should be reassuring the public that this new system will be ready to run, on time, from next April.”

A Scottish Government spokesman s aid: “This approach has been agreed between the Scottish and UK Governments and is part of our efforts to ensure that Scottish taxpayers are fully aware of the changes and how they are affected.”