I have a client who has always worked in England, but for just over six months in the middle of 2019/20, he was seconded to a Scotland based company. The original company maintained the payroll for him throughout and consequently the P60 details were entered on the 2020 SA return, and PAYE had collected the correct amount of tax. With having no experience of any other Scottish based clients, I did not consider the possibility of any issues, but receipt of an SA302 quickly focused the mind, as the calculation set out a tax liability of over £4000, by reason of the whole years income being assessed at Scottish Rates.
I have now read the relevant HMRC guidance, which indicates that if the taxpayer spends more time in Scotland than in any other part of the UK, their total income is subject to Scottish tax rates, and whilst I could understand the `Scottish period` earnings being assessed at Scottish rates, it seems inequitable that just under 50% of total income, earned in England, is assessed at the higher rates.
Can anyone confirm that this is indeed correct, or are there grounds for mitigation.