Home Personal Finance Scottish Revenue Tax Outturn Statistics: 2020 to 2021

Scottish Revenue Tax Outturn Statistics: 2020 to 2021

Income Statistics 2019 to 2020: Summary for Tables 3.12 to 3.15a

1. Overview

The goal of those Experimental Statistics is to offer customers with data of curiosity in relation to the Scottish Revenue Tax (SIT) Outturn. This particulars web non-savings non-dividends (NSND) Revenue Tax for Scottish taxpayers.

This publication additionally exhibits:

what number of Scottish taxpayers are liable at every charge of tax
an Outturn of Scottish Revenue Tax income at every charge of tax
an estimated breakdown of the NSND Revenue Tax paid by Scottish taxpayers break up between funds collected by way of Pay as You Earn (PAYE) and funds collected by way of Self Evaluation (SA)

Moreover, the statistical tables launched alongside this bulletin additionally present equal data for the remainder of the UK (rUK) taxpayers on the identical foundation so comparisons might be made. References to numbered tables all through this bulletin seek advice from statistical tables launched alongside this bulletin. References to tables labelled with letters pertain to the tables current throughout the bulletin.

Calculations on this bulletin (for instance, on the typical tax paid by taxpayers) are primarily based on unrounded numbers so might not match calculations primarily based on figures within the statistical launch that are rounded.

1.1 What does it imply that these are Experimental Statistics?

Experimental Statistics are statistics which might be inside their growth section and are revealed with a purpose to contain potential customers at an early stage in constructing a high-quality set of statistics that meet consumer wants.

The Experimental Statistics label highlights to customers that HM Income and Customs (HMRC) are nonetheless engaged on additional creating the type and content material for the tables and commentary on this publication.

It must be emphasised that the label of Experimental Statistics doesn’t imply that the statistics are of low high quality, nevertheless it does signify that the statistics are novel and what statistics are reported and the way remains to be being developed.

2. Important Findings

2.1 Be aware on the definition of ‘rUK’

From 2019 to 2020, a proportion of Revenue Tax paid by taxpayers dwelling in Wales has been transferred to the Welsh Authorities via the introduction of the Welsh Charges of Revenue Tax (WRIT). These are managed by the Welsh Authorities (WG). HMRC publishes separate statistics on Welsh Revenue Tax.

Previous to 2020 to 2021, indexing of the Scottish Block Grant was primarily based upon progress of NSND Revenue Tax in England, Northern Eire and Wales (EWNI). Nonetheless, with the introduction of WRIT the indexing of the Scottish Block Grant will now be decided by the NSND Revenue Tax Outturn for England and Northern Eire (ENI) solely. Regardless of the rest of WRIT being allotted to rUK; this isn’t used to calculate the Block Grant Adjustment for Scotland.

From the 2020 to 2021 reconciliation onwards, the rUK (ENI) outturn will likely be utilized by HM Treasury to calculate and agree with the Scottish Authorities (SG) the BGA reconciliation.

All rUK figures on this bulletin embrace England and Northern Eire outturn solely.

2.2 Scottish Revenue Tax 2020 to 2021

The principle findings of those statistics are:

the whole quantity of NSND Revenue Tax generated by Scottish taxpayers within the 2020 to 2021 tax 12 months was £11,948 million – a rise of 1.0% in comparison with 2019 to 2020
this represents a mean enhance in NSND Revenue Tax of £25 per Scottish taxpayer
the whole quantity of NSND Revenue Tax generated by rUK taxpayers within the 2020 to 2021 tax 12 months was £163,460 million – a rise of two.0% in comparison with 2019 to 2020
this represents a mean enhance in NSND Revenue Tax of £95 per rUK taxpayer
the whole variety of Scottish taxpayers within the 2020 to 2021 tax 12 months was 2,537,900 – a rise of 0.5% in comparison with 2019 to 2020
the whole variety of rUK taxpayers within the 2020 to 2021 tax 12 months was 27,002,800 – a rise of 0.4% in comparison with 2019 to 2020
the Scottish share of UK NSND Revenue Tax has decreased from 6.7% within the 2019 to 2020 tax 12 months to six.6% within the 2020 to 2021 tax 12 months

3. Background

3.1 Definitions of ‘non-savings non-dividends’

The statistics in Tables 1 to three present data detailing Revenue Tax due on NSND earnings. NSND earnings consists of earnings from employment, pensions, income from self-employed sources and property.

All Revenue Tax due on NSND earnings is devolved to Scotland. These tables present a comparability of how NSND Revenue Tax for Scottish taxpayers compares to that of rUK taxpayers.

Tax on NSND earnings in these tables is measured because the Revenue Tax legal responsibility anticipated to be collected by HMRC. There may be additionally an adjustment to replicate reliefs which aren’t allotted to particular person taxpayer accounts.

Taxpayers in these tables are outlined as people who’ve some web NSND Revenue Tax legal responsibility due after reliefs have been deducted from their Revenue Tax invoice.

In Desk 2, taxpayers have been assigned to a marginal tax charge (the Revenue Tax band {that a} taxpayer would pay their subsequent pound of Revenue Tax into) primarily based solely on their NSND Revenue Tax, nonetheless, it’s attainable that they’ve paid tax at the next charge on their financial savings/dividend earnings.

3.2 Established liabilities and the place tax is paid

Employers and pension suppliers should usually function PAYE as a part of their payroll. PAYE is HMRC’s system to gather Revenue Tax and Nationwide Insurance coverage (NI) from employments and is basically paid in the identical 12 months because the taxable exercise. When an employer pays their staff via payroll, additionally they have to make tax and NI deductions for PAYE. Employers are then obliged to report the quantity of those funds and deductions to HMRC in addition to paying the tax and NI deducted to HMRC.

A person is required to file a Self Evaluation (SA) return in the event that they meet sure standards. That is required even for people who additionally pay employment earnings into the PAYE system, if a requirement for submitting in SA is met. SA returns are usually submitted within the 12 months after the taxable exercise has taken place, and the SA return submitting deadline is often 9 months after the tax 12 months has ended.

For the outturn calculation, a person who information an SA return may have all their Revenue Tax legal responsibility established (reconciled) in SA once they submit their return, even when they’ve had some tax deducted via PAYE.

A person who isn’t required to file in SA may have their legal responsibility established in PAYE when their tax data is reconciled by the Nationwide Insurance coverage and PAYE Service (NPS).

Desk 3 exhibits the system that established NSND Revenue Tax liabilities are paid via; that’s ‘collected at supply’ (PAYE) or paid via SA. This break up in desk 3 is totally different to the break up of established liabilities in desk 1, which relies on the system which the people’ liabilities are reconciled in.

For instance, a person incomes earnings from an employment and extra sources might have their employment Revenue Tax deducted from their pay by their employer, while additionally paying Revenue Tax for added earnings (e.g. property earnings) by submitting an SA return. On this case, all Revenue Tax for this taxpayer is recorded within the SA Established part of the outturn as that is the place the report will likely be reconciled. Nonetheless, quantities paid will likely be break up between PAYE and SA accordingly, as is mirrored in desk 3.

4. Scottish NSND Revenue Tax Outturn and rUK comparability

4.1 Outturn parts

Desk 1 of the statistical launch exhibits how every part of the outturn is mixed to calculate the determine for the whole NSND Revenue Tax for Scottish taxpayers. We additionally see how this compares to rUK. Please see part 7 for additional data on the outturn parts.

Total, SIT grew barely lower than rUK Revenue Tax (1.0% in comparison with 2.0%). SIT had stronger progress in SA Established Liabilities (1.5%) in comparison with PAYE Established Liabilities (0.6%).

The biggest parts of the outturn are SA Established Legal responsibility and PAYE Established Legal responsibility. Extra NSND Revenue Tax legal responsibility is established via PAYE in Scotland while extra is established via SA for rUK. Desk 1 beneath exhibits 57.5% of rUK liabilities are reconciled within the SA Established part, while the identical determine for SIT is 42.8%.

Determine 1: Breakdown of NSND Revenue Tax for Scottish taxpayers by part, 2019 to 2020 and 2020 to 2021

Desk A: Breakdown of NSND Revenue Tax for Scottish taxpayers by part, 2019 to 2020 and 2020 to 2021

2019 to 2020 Scottish NSND Revenue Tax
2020 to 2021 Scottish NSND Revenue Tax

SA Established Legal responsibility
£5,041 million
£5,116 million

PAYE Established Legal responsibility
£6,845 million
£6,884 million

Estimated additional Legal responsibility
£307 million
£315 million
Adjustment for uncollectable quantities
-£89 million
-£97 million
Aid at Supply (RAS)
-£172 million
-£155 million
Reward Help
-£108 million
-£114 million
Whole
£11,825 million
£11,948 million

Determine 2: Breakdown of NSND Revenue Tax for rUK taxpayers by part, 2019 to 2020 and 2020 to 2021

Desk B: Breakdown of NSND Revenue Tax for rUK taxpayers by part, 2019 to 2020 and 2020 to 2021

2019 to 2020 rUK NSND Revenue Tax
2020 to 2021 rUK NSND Revenue Tax

SA Established Legal responsibility
£91,454 million
£94,068 million

PAYE Established Legal responsibility
£68,177 million
£68,761 million

Estimated additional Legal responsibility
£5,410 million
£5,461 million
Adjustment for uncollectable quantities
-£1,580 million
-£1,694 million
Aid at Supply (RAS)
-£1,935 million
-£1,841 million
Reward Help
-£1,221 million
-£1,294 million
Whole
£160,305 million
£163,460 million

Though the SA Established part constitutes nearly all of rUK liabilities by reconciliation methodology, nearly all of liabilities within the rUK system are paid at supply (via a PAYE scheme). Desk 3 of the statistical launch exhibits 85.0% of all rUK liabilities are collected via the PAYE system. For Scotland, the equal determine is 87.6% – the bottom determine in our time sequence.

The decrease proportion of tax collected at supply is partially brought on by a considerably larger proportion of rUK taxpayers being required to submit SA returns in comparison with SIT taxpayers.

Desk C: Established Scottish NSND Revenue Tax by assortment methodology, 2016 to 2017 via to 2020 to 2021

2016 to 2017 Scottish NSND Revenue Tax
2017 to 2018 Scottish NSND Revenue Tax
2018 to 2019 Scottish NSND Revenue Tax
2019 to 2020 Scottish NSND Revenue Tax
2020 to 2021 Scottish NSND Revenue Tax

Collected at Supply
£9,758 million (88.5%)
£9,891 million (88.1%)
£10,465 million (87.9%)
£10,791 million (88.5%)
£10,790 million (87.6%)
Paid via SA

£1,271 million (11.5%)
£1,340 million (11.9%)
£1,435 million (12.1%)
£1,401 million (11.5%)
£1,524 million (12.4%)

Whole NSND Revenue Tax
£10,706 million
£10,908 million
£11,549 million
£11,825 million
£11,948 million

4.2 Tax liabilities by band – all NSND Revenue Tax

Desk 2 of the statistical launch gives breakdowns of all NSND Revenue Tax liabilities by tax band and taxpayer varieties (outlined by their highest marginal charge; the Revenue Tax band {that a} taxpayer would pay their subsequent pound of Revenue Tax into).

There was a slight enhance within the proportion of upper charge taxpayers in Scotland (14.3% in 2020 to 2021 in comparison with 14.1% in 2019 to 2020), persevering with the upward pattern from 2018 to 2019 (12.7%). Though the proportion of upper charge taxpayers is smaller for rUK, the share enhance between 2019 to 2020 and 2020 to 2021 was just like SIT from 11.3% to 11.7%.

Determine 3: Share of Scottish and rUK taxpayers by their marginal tax charge, 2019 to 2020 and 2020 to 2021

Desk D: Share of Scottish and rUK taxpayers by their marginal tax charge, 2019 to 2020 and 2020 to 2021

2019 to 2020 Scottish Taxpayers
2019 to 2020 rUK Taxpayers
2020 to 2021 Scottish Taxpayers
2020 to 2021 rUK Taxpayers

Starter Fee Taxpayer
9.9%
N/A
9.7%
N/A
Primary Fee Taxpayer
41.5%
87.4%
41.5%
87.0%
Intermediate Fee Taxpayer
33.9%
N/A
34.0%
N/A
Greater Fee Taxpayer
14.1%
11.3%
14.3%
11.7%
Extra/High Fee Taxpayer
0.6%
1.3%
0.6%
1.3%

Desk E highlights that though a small proportion (14.8%) of Scottish taxpayers have been larger or prime charge taxpayers, they have been answerable for 59.8% of NSND Revenue Tax in Scotland throughout 2020 to 2021.

Determine 4: Proportion of Scottish and rUK NSND Revenue Tax paid by every taxpayer kind, 2019 to 2020 and 2020 to 2021

Desk E: Proportion of Scottish and rUK NSND Revenue Tax paid by every taxpayer kind, 2019 to 2020 and 2020 to 2021

2019 to 2020 Scottish Taxpayers
2019 to 2020 rUK Taxpayers
2020 to 2021 Scottish Taxpayers
2020 to 2021 rUK Taxpayers

Starter Fee Taxpayer
0.4%
N/A
0.4%
N/A
Primary Fee Taxpayer
10.2%
35.1%
10.7%
34.9%
Intermediate Fee Taxpayer
29.1%
N/A
29.1%
N/A
Greater Fee Taxpayer
43.5%
32.5%
43.7%
32.7%
Extra/High Fee Taxpayer
16.8%
32.4%
16.1%
32.4%

The proportion of whole NSND Revenue Tax liable on the larger and prime charge tax bands decreased barely in Scotland between 2019 to 2020 and 2020 to 2021 (from 40.5% to 39.9%) regardless of the thresholds for every of those bands remaining unchanged. The variety of larger charge taxpayers elevated by 1.9% and the variety of prime charge taxpayers decreased by 4.7% over the interval.

Determine 5: Share of Scottish and rUK NSND Revenue Tax by Revenue Tax band, 2019 to 2020 and 2020 to 2021

Desk F: Share of Scottish and rUK NSND Revenue Tax by Revenue Tax band, 2019 to 2020 and 2020 to 2021

2019 to 2020 Scottish NSND Revenue Tax
2019 to 2020 rUK NSND Revenue Tax
2020 to 2021 Scottish NSND Revenue Tax
2020 to 2021 rUK NSND Revenue Tax

Starter Fee
7.7%
N/A
7.8%
N/A
Primary Fee
28.2%
50.9%
28.9%
50.8%
Intermediate Fee
23.5%
N/A
23.3%
N/A
Greater Fee
30.8%
28.1%
30.6%
27.9%
Extra/High Fee
9.7%
21.0%
9.3%
21.2%

4.3 Common Quantities of NSND Revenue Tax Legal responsibility

There was a discount in common NSND Revenue Tax paid on the intermediate charge in SIT from 2019 to 2020 and 2020 to 2021. This could partly be defined by a £214 narrowing of the intermediate charge Revenue Tax band (see Desk M). The narrowing of this Revenue Tax band reduces the utmost tax that may be paid into this band by £44.94.

Determine 6: Common NSND Revenue Tax paid at every Revenue Tax Band, 2019 to 2020 and 2020 to 2021

Desk G: Common NSND Revenue Tax paid at every Revenue Tax band, 2019 to 2020 and 2020 to 2021

2019 to 2020 Scottish NSND Revenue Tax
2019 to 2020 rUK NSND Revenue Tax
2020 to 2021 Scottish NSND Revenue Tax
2020 to 2021 rUK NSND Revenue Tax

Starter Fee
£363
N/A
£369
N/A
Primary Fee
£1,465
£3,030
£1,508
£3,077
Intermediate Fee
£2,266
N/A
£2,249
N/A
Greater Fee
£9,832
£13,313
£9,701
£13,006
Extra/High Fee
£74,361
£97,160
£75,684
£98,927

Each SIT and rUK exhibit will increase in common NSND Revenue Tax generated for all taxpayer varieties (outlined by their highest marginal charge), other than the upper charge taxpayers.

The common NSND Revenue Tax paid by larger charge taxpayers in Scotland decreased from £14,477 in 2019 to 2020 to £14,432 in 2020 to 2021 (a lower of 0.3%).

There have been roughly 700 fewer prime charge taxpayers within the 2020 to 2021 tax 12 months and the typical NSND Revenue Tax for prime charge taxpayers grew by £1,619 (1.3%).

Comparable developments are current within the rUK knowledge, with the typical rUK larger charge taxpayer’s legal responsibility declining by £228 from £17,155 in 2019 to 2020 to £16,927 in 2020 to 2021.

These adjustments have been pushed by actions within the NSND earnings distribution of Scottish and rUK taxpayers.

Determine 7: Common NSND Revenue Tax paid by every taxpayer kind, 2019 to 2020 and 2020 to 2021

Desk H: Common NSND Revenue Tax paid by every taxpayer kind, 2019 to 2020 and 2020 to 2021

2019 to 2020 Scottish NSND Revenue Tax
2019 to 2020 rUK NSND Revenue Tax
2020 to 2021 Scottish NSND Revenue Tax
2020 to 2021 rUK NSND Revenue Tax

Starter Fee Taxpayers
£186
N/A
£187
N/A
Primary Fee Taxpayers
£1,156
£2,392
£1,213
£2,428
Intermediate Fee Taxpayers
£4,010
N/A
£4,039
N/A
Greater Fee Taxpayers
£14,477
£17,155
£14,432
£16,927
Extra/High Fee Taxpayers
£128,665
£149,648
£130,284
£150,864

5. Indicative In-12 months Scottish Revenue Tax

5.1 Background

HMRC gives in 12 months monitoring for Scottish NSND Revenue Tax from Actual Time Data (RTI) knowledge to the Scottish Authorities (SG), Scottish Fiscal Fee (SFC) and the Workplace for Price range Duty (OBR) every month.

Desk 4 of the statistical launch exhibits these statistics as a month-to-month time sequence. It exhibits the quantity of UK Revenue Tax withheld by employers on behalf of their staff (as reported in RTI) and the proportion of tax from Scottish taxpayers. The desk additionally comprises quantities of Revenue Tax withheld on behalf of Welsh residing taxpayers.

The Revenue Tax measure in Desk 4 isn’t equal to that offered in Tables 1 to three as Revenue Tax in RTI will embrace quantities for reserved expenses aside from NSND Revenue Tax. For instance, any tax code changes to account for Financial savings and Dividend Revenue or Excessive Revenue Little one Profit Tax cost (HICBC), which aren’t devolved to the Scottish authorities.

Nonetheless, it’s a helpful information of the in-year Revenue Tax paid by SIT taxpayers previous to the publication of the Outturn statistics.

Scottish taxpayers are recognized utilizing the Scottish indicator variable offered by NPS (see part 6.2 for extra particulars of how Scottish taxpayers are outlined in NPS).

Though, the tax figures are up to date for every month throughout the in-year month-to-month course of. The ultimate RTI month-to-month time sequence will usually not be up to date following the tip of the tax 12 months.

5.2 Revenue Tax reported as withheld from RTI

There are seasonal fluctuations throughout the month-to-month time sequence of withheld Revenue Tax in RTI. These are comparatively constant all through the interval 2019 to 2020 to 2021 to 2022.

There’s a clear spike in tax in March every year. This displays the time interval when bonuses are usually paid on the finish of the tax 12 months.

There may be additionally a smaller spike in December which is more likely to replicate a rise in employment exercise across the Christmas vacation interval, for instance, seasonal staff in supermarkets.

Determine 8: RTI Revenue Tax reported as withheld for Scottish taxpayers, 2019 to 2020 via to 2021 to 2022

Desk I: RTI Revenue Tax reported as withheld for Scottish taxpayers, 2019 to 2020 via to 2021 to 2022

Month
2019 to 2020
2020 to 2021
2021 to 2022
April
£930 million
£912 million
£1,027 million
Could
£915 million
£882 million
£994 million
June
£954 million
£884 million
£980 million
July
£884 million
£895 million
£974 million
August
£863 million
£904 million
£991 million
September
£914 million
£882 million
£958 million
October
£874 million
£930 million
£1,013 million
November
£878 million
£919 million
£1,000 million
December
£970 million
£983 million
£1,099 million
January
£896 million
£960 million
£1,069 million
February
£925 million
£954 million
£1,064 million
March
£1,113 million
£1,110 million
£1,350 million

Seasonal fluctuations within the Scottish share of the entire UK RTI Revenue Tax are additionally comparatively in line with the 2 earlier tax years.

Following on from an October peak, the Scottish share reveals a gradual decline up till it reaches a low level of round 7% in March. This possible displays bonus funds forming a smaller proportion of remuneration for Scottish staff in comparison with rUK.

Nonetheless, usually, the share has decreased persistently because the 2019 to 2020 tax 12 months, with the general common for the 2021 to 2022 tax 12 months being 6.75%.

Determine 9: Scottish share of RTI Revenue Tax reported as withheld, 2019 to 2020 via to 2021 to 2022

Desk J: Scottish share of RTI Revenue Tax reported as withheld, 2019 to 2020 via to 2021 to 2022

Month
2019 to 2020
2020 to 2021
2021 to 2022
April
7.11%
7.12%
7.06%
Could
7.21%
7.17%
6.91%
June
7.31%
7.04%
6.91%
July
7.12%
7.21%
6.87%
August
7.19%
7.25%
7.11%
September
7.42%
7.04%
6.85%
October
7.28%
7.41%
7.17%
November
7.29%
7.20%
7.11%
December
7.22%
6.98%
6.87%
January
6.61%
6.61%
6.48%
February
6.51%
6.34%
6.14%
March
6.35%
6.20%
6.09%
Common
7.02%
6.93%
6.75%

6. Definitions

6.1 Background

The Scotland Act 2012 gave the Scottish Parliament the facility to set a Scottish charge of Revenue Tax (SRIT). SRIT utilized to non-saving non-dividend (NSND) earnings solely; financial savings and dividend (SANDD) earnings was not devolved. It allowed the Scottish Authorities (SG) to alter the quantity of Revenue Tax that Scottish taxpayers pay and, because of this, the quantity that the SG needed to spend on their annual Price range.

SRIT changed 10 share factors of every of the principle UK charges of tax for the tax 12 months commencing 6 April 2016. In that 12 months the UK fundamental, larger and extra charges for NSND earnings have been lowered by 10 pence within the pound for Scottish taxpayers. This discount was changed by a Scottish charge set at 10 share factors, so the general charges paid by Scottish taxpayers remained the identical as elsewhere within the UK.

The Scotland Act 2016 prolonged these powers, enabling the Scottish Parliament to set the tax band thresholds (excluding the Private Allowance) in addition to the charges. This is applicable to all NSND earnings of Scottish taxpayers and took impact from 6 April 2017.

On account of the Scotland Act 2016; the Scottish authorities determined to arrange separate charges of Revenue Tax for Scottish taxpayers with the brand new charges taking impact from the 2018 to 2019 tax 12 months (see desk M and N). These tax charges included two new tax bands: the starter and intermediate charge.

6.2 Who’s a Scottish taxpayer?

The definition of a Scottish taxpayer relies on the place a person resides in the midst of a tax 12 months. Scottish taxpayer standing applies for a complete tax 12 months – it’s not attainable to be a Scottish taxpayer for a part of a tax 12 months.

For many taxpayers, the placement the place they dwell will likely be apparent, however there will likely be much less easy circumstances – for instance, the place individuals have multiple house, or have moved into or out of Scotland throughout the 12 months. HMRC has offered steering to assist in these circumstances.

The situation of an individual’s employer isn’t related. So, for instance, somebody who works in Scotland, however has their house elsewhere within the UK, is not going to be a Scottish taxpayer.

Detailed steering to whom Scottish Revenue Tax will apply

6.3 How do the tax methods on NSND earnings examine for Scottish and rUK taxpayers?

In 2018 to 2019 SIT was modified to introduce 2 new tax bands, the starter charge (19%) and the intermediate charge (21%) both facet of the fundamental charge (20%). The upper and prime charges of tax have been additionally elevated by 1% for Scottish taxpayers rising from 40% and 45% to 41% and 46%, respectively.

The upper charge threshold for rUK elevated to £50,000 in 2019 to 2020 however remained unchanged at £43,430 for Scotland.

Desk M: Scottish and rUK Revenue Tax Thresholds, 2019 to 2020 and 2020 to 2021

Tax Band Threshold
Scotland 2019 to 2020
rUK 2019 to 2020
Scotland 2020 to 2021
rUK 2020 to 2021
Private Allowance
£12,500
£12,500
£12,500
£12,500
Primary Fee Threshold
£14,549
N/A
£ 14,585
N/A
Intermediate Fee Threshold
£24,944
N/A
£25,158
N/A
Greater Fee Threshold
£43,430
£50,000
£43,430
£50,000
Extra/High Fee Threshold
£150,000
£150,000
£150,000
£150,000

Desk N: Tax charges for Scottish and rUK Revenue Tax, 2019 to 2020 and 2020 to 2021

Tax Charges
Scotland 2019 to 2020
rUK 2019 to 2020
Scotland 2020 to 2021
rUK 2020 to 2021
Starter Fee
19%
N/A
19%
N/A
Primary Fee
20%
20%
20%
20%
Intermediate Fee
21%
N/A
21%
N/A
Greater Fee
41%
40%
41%
40%
Extra/High Fee
46%
45%
46%
45%

6.4 Why are we producing these statistics?

The SIT outturn in HMRC’s Annual Report determines the SG’s Revenue Tax revenues whereas the equal outturn for Revenue Tax on NSND earnings for rUK taxpayers in these statistics is utilized by HMT to find out the deduction to the SG’s Block Grant. The ultimate changes to the SG’s Block Grant will solely be confirmed as soon as the figures on this publication have been formally signed off by the NAO via their annual audit of the HMRC Belief Assertion.

These statistics are being revealed to provide extra details about NSND Revenue Tax paid by Scottish taxpayers.

6.5 What’s the relationship between these statistics and different private tax statistics and data?

There are different publications which present related statistics to what’s proven on this publication. It is very important perceive how these different statistics relate to what’s being launched right here and spotlight variations in protection or knowledge used to compile every set of statistics.

The next publications are defined beneath:

Devolved tax and spending forecasts (OBR)
Scotland’s Financial and Fiscal forecasts (SFC)
Private Revenue Statistics from the Survey of Private Incomes
Earnings and Employment Statistics from PAYE Actual Time Data
Revenue Tax Receipts Publication

OBR: Devolved tax and spending forecasts

The OBR was established in 2010 to offer impartial and authoritative evaluation of the UK’s public funds. Alongside the UK Authorities’s Budgets and different fiscal statements, they produce forecasts for the financial system and the general public funds. They publish these of their Financial and Fiscal Outlook (EFO).

Since 2014, the OBR have additionally forecasted the tax streams which might be devolved to the Scottish Parliament. The OBR publish devolved tax and spending forecasts alongside every EFO which might be in line with their essential UK forecasts. The Treasury attracts on the OBR’s tax forecasts when making spending settlements for the Scottish Authorities in accordance with their fiscal framework.

Within the EFO, the OBR forecast primarily based on the nationwide accounts, with SA recorded within the 12 months through which it’s acquired. This contrasts to the OBR Devolved tax and spending publication and within the statistics set out right here, the place SA is recorded on a liabilities foundation (i.e. within the 12 months through which the tax legal responsibility arose).

The newest OBR devolved forecasts of SIT have been revealed in March 2022. This exhibits the OBR forecast of SIT for 2020 to 2021 to be £12.3bn and the rUK NSND equal to be £169.3bn.

OBR March 2022 Devolved Tax and Spending Forecast

SFC: Scotland’s Financial and Fiscal forecasts

The SFC was established in 2017 and is Scotland’s official and impartial funds forecaster. As such, it’s the SFC’s forecasts, quite than the OBR’s forecast, for SIT that determines the quantity the Scottish Authorities can draw down from the Treasury. The SFC experiences to the Scottish Parliament.

The SFC produces 5-year forecasts of SG tax revenues, social safety expenditure and of the Scottish financial system. The SFC publication ‘Scotland’s Financial and Fiscal Forecasts’ particulars their forecasts of devolved taxes together with devolved Revenue Tax. This publication additionally gives an evidence of how the SFC and OBR forecasts, in addition to the outturn offered on this SIT publication, are used to regulate Scotland’s Price range.

The newest SFC Financial and Fiscal Forecasts publication was launched in Could 2022. This exhibits the SFC forecast of SIT to be £12,118 million for 2020 to 2021.

SFC Financial and Fiscal forecasts

SPI: Private Revenue Statistics

HMRC launch an annual publication from the Survey of Private Incomes (SPI) which exhibits statistics for taxpayers’ private incomes. This publication gives breakdowns to spotlight the variety of people with totally different sources of earnings and topic to sure reliefs.

In March 2022 HMRC revealed the annual Private Revenue statistics for 2019 to 2020 that are primarily based on the SPI. The information used within the SPI publication is totally different to the info used on this publication.

The SPI is a pattern of round 800,000 people in both SA or PAYE. The SPI is designed to measure whole earnings and the whole tax affect on the Exchequer and subsequently consists of the tax affect of RAS funds to pension suppliers and Reward Help funds to charities. It additionally measures legal responsibility and takes no account of some tax not being collected.

Private Revenue Statistics

There’s a additional HMRC publication, ‘Revenue Tax Statistics and Distributions’, which gives projections for future tax years primarily based on the SPI. The projections in that publication replicate introduced adjustments to the Revenue Tax system and use determinants from the OBR to mannequin tax liabilities in future years. The newest publication of this sequence was launched in June 2022 and gives projections for tax years 2019 to 2020 to 2022 to 2023.

Revenue Tax Statistics and Distributions

The statistics offered in these two publications aren’t anticipated to be in line with what’s proven on this publication. This is because of sampling variation, the measurement variations described above and the truth that projections are a forecast of how tax liabilities might evolve for future years.

RTI: Earnings and Employment Statistics

Since April 2020 HMRC and the Workplace for Nationwide Statistics (ONS) have collectively launched month-to-month statistics on earnings and employment statistics utilizing knowledge from PAYE RTI. The goal of this publication is to offer customers with data on the variety of people receiving pay from PAYE, their imply and median pay as paid via PAYE and the whole quantity of pay from PAYE in every nation or area of the UK.

UK Actual Time Data Experimental Statistics

The statistics within the RTI earnings and employment publication are totally different to the RTI statistics proven in Desk 4 of this statistical launch, though each are compiled from the identical supply of knowledge.

The RTI publication presents data referring to staff solely and excludes knowledge on funds made to occupational pensioners whereas this publication consists of tax collected from occupational pensions in addition to employments

As well as, the RTI publication solely presents statistics for variety of staff and their pay. This launch exhibits tax collected by way of PAYE, which can embrace assortment of tax due on different earnings collected by way of the PAYE tax code. This could come up from financial savings or dividend earnings and different expenses such because the HICBC.

Revenue Tax Receipts Publication

HMRC publish an annual Nationwide Statistics publication on Revenue Tax Receipts. The statistics offered on this publication present tax liabilities for particular tax years.

Revenue Tax Receipts Statistics

Liabilities are quantities of tax due on incomes arising in a given tax 12 months, whereas receipts present quantities paid and picked up in a given 12 months. Resulting from lags within the Revenue Tax fee regimes, notably for SA, liabilities and receipts for a similar 12 months can differ considerably.

Liabilities and receipts may even differ for different causes, for instance when over or underpayments happen that are repaid or recovered in a later 12 months altering whole receipts in that 12 months in a manner unrelated to tax liabilities for that 12 months.

7. Outturn knowledge methodology

The methodology set out on this part displays the methodology for calculating the outturn which has been agreed between the SG and HMRC.

The ultimate outturn figures replicate accrued income and have been calculated utilizing precise liabilities knowledge along with some estimation the place precise knowledge is unavailable. Particulars of this for every of the 6 parts of the outturn determine is defined beneath.

Whole NSND outturn =

+SA Established legal responsibility
+PAYE established legal responsibility
+Estimated additional legal responsibility
-Adjustment for uncollectable quantities
-Aid at Supply (RAS) pension reduction
-Reward Help

7.1
SA Established Legal responsibility

Revenue Tax legal responsibility is established for all people in SA as soon as their SA return has been acquired and their tax calculation has been performed.

This consists of any particular person who’s required to file a SA return who additionally has an employment or occupational pension for which tax is deducted at supply via PAYE.

The established legal responsibility for individuals who submit an SA return is calculated for every taxpayer recognized in SA by summing the Revenue Tax due at every tax charge on NSND earnings after which lowering it by a share of reliefs.

Reliefs

Revenue Tax reliefs scale back the whole quantity of Revenue Tax a person is liable to pay.

Some reliefs, reminiscent of reduction for qualifying distributions and refinance reduction for landlords, can solely be claimed when a person has a particular supply of earnings. In calculating the SA established legal responsibility, such reliefs are prioritised to the suitable stream of earnings earlier than any extra is apportioned to different streams of earnings.

All different reliefs, reminiscent of marriage allowance, married {couples}’ allowance and reduction for present assist funds, might be claimed no matter what earnings sources a person has. These ‘generic’ reliefs are utilized proportionately to tax due on financial savings/dividend earnings and tax due on NSND earnings primarily based on the extent of gross Revenue Tax legal responsibility.

Different SA expenses and CRCs

There are different expenses which might be raised towards a person in SA via investigations/assessments or by way of a ‘Create Return Cost’ when a person has did not submit their return.

These further expenses, if recognized when knowledge is being compiled, are additionally included when figuring out the SA established Revenue Tax legal responsibility.

The cost might embrace different tax liabilities (for instance Capital Positive factors Tax). The share of the cost that pertains to Revenue Tax is subsequently estimated. That is primarily based on the share of whole legal responsibility referring to Revenue Tax for taxpayers who’ve submitted their return.

Scottish share

The entire SA established Scottish legal responsibility is then calculated by summing the NSND legal responsibility, web of reliefs, throughout every Scottish taxpayer in SA.

Scottish taxpayers are outlined by having a Scottish tax calculation within the SA system or being included within the Scottish NPS extract defined beneath.

The rUK established SA legal responsibility is calculated in the same manner however summing throughout all rUK taxpayers the place rUK taxpayers are all taxpayers not included within the Scottish or Welsh NPS extracts.

Taxpayers who’ve indicated they have been non-resident of their SA return will likely be counted as rUK taxpayers.

7.2
PAYE Established Legal responsibility

PAYE established legal responsibility consists of:

liabilities for people who’re reconciled in PAYE

PAYE settlement agreements

People reconciled in PAYE

For people who’re in PAYE however haven’t been issued with a discover to file in SA, their Revenue Tax legal responsibility is established when their PAYE account is reconciled.

Bespoke knowledge extracts of all Scottish and rUK people in NPS for every tax 12 months have been commissioned particularly to help in compiling the outturn figures.

This offered the legal responsibility for NSND earnings, web of reliefs, for all Scottish and rUK taxpayers by tax charge.

PAYE settlement agreements

The established PAYE quantity features a share of liabilities raised via PAYE Settlement Agreements (PSA).

A PSA permits an employer to make one annual fee to cowl all of the tax and NI due on minor, irregular or impracticable bills or advantages for his or her staff.

The bills and advantages mirrored within the PSA aren’t recorded via payroll and aren’t required to be included on finish of 12 months P11D varieties, through which different employment bills and advantages are reported to HMRC.

The Scottish share is set through the use of RTI knowledge to find out the share of Revenue Tax withheld by employers via PAYE schemes which have a PSA. RTI knowledge can be used to find out how the tax is distributed throughout tax bands for Scottish and rUK taxpayers.

7.3 Estimated additional legal responsibility

Along with the established legal responsibility the ultimate outturn determine consists of an estimate for:

liabilities from late filed SA returns
liabilities realised from compliance exercise
liabilities from unreconciled PAYE circumstances

Late filed SA returns

The worth of late filed SA returns has been estimated for every tax 12 months by analyzing historic SA knowledge to find out the sample of SA submitting within the previous 5 tax years. It’s assumed that the typical progress of liabilities for these years will likely be just like how the liabilities will develop for the years offered in these statistics.

That is carried out individually for Scottish and rUK taxpayers. Taxpayers with a Scottish postcode have been used as a proxy for Scottish taxpayers in these years, as no Scottish indicator exists earlier than SIT was launched.

That is carried out at a complete stage and a tax band stage. The estimated worth of late filed SA returns at every tax band is then scaled to the whole estimated worth.

Liabilities from compliance exercise

Included within the estimated additional legal responsibility is an quantity to replicate Contract Settlement Agreements that are raised as a part of compliance investigations. The Scottish and rUK NSND share (in addition to the break up between tax bands) of that is assumed to be the identical proportion as noticed within the SA established legal responsibility.

As many Contract Settlement Agreements will likely be raised within the tax years following the outturn, this quantity is estimated. The estimate is forecast primarily based on the whole worth of Contract Settlement Agreements in earlier tax years and OBR’s forecast of future SA Revenue Tax.

For the 2020 to 2021 outturn, the forecast was barely adjusted to keep in mind beneath common Contract Settlement Settlement receipts within the 2021 to 2022 tax 12 months brought on by COVID-19.

Liabilities from unreconciled PAYE circumstances

Virtually all PAYE circumstances are reconciled inside 12 months of the tip of the tax 12 months. Nonetheless, complicated tax affairs or operational adjustments signifies that HMRC sometimes delays some prospects’ finish of 12 months reconciliations to stop them receiving an incorrect tax calculation or accounting replace.

The Revenue Tax liabilities for these unreconciled circumstances has been estimated through the use of knowledge from RTI.

7.4 Adjustment for uncollectable quantities

Uncollected SA quantities

An preliminary quantity of uncollected debt for the present outturn 12 months is calculated through the use of present SA knowledge.

The proportion of this debt that will likely be collected sooner or later is estimated through the use of the identical historic SA knowledge over the earlier 5 tax years used to determine the late filed SA returns for the ‘Estimated additional legal responsibility’. The common progress within the assortment charge of SA liabilities noticed on this historic knowledge is utilized to the preliminary quantity of uncollected debt within the present outturn 12 months. That is accomplished individually for Scottish and rUK taxpayers to calculate particular uncollected quantities for every.

That is carried out at a complete stage and a tax band stage. The estimated worth of uncollected quantities at every tax band is then scaled to the whole estimated uncollected quantity.

Uncollected PAYE quantities

Not all tax due is collected by HMRC and a few is subsequently remitted or written off when it can’t be recovered.

This part displays the quantity written off from PAYE employers once they have did not pay all of the Revenue Tax they have been anticipated to.

The uncollected quantity relies on HMRC PAYE Revenue Tax write-offs/remissions knowledge. The information is used to calculate the worth of write-offs/remissions which have already taken place for the outturn 12 months and to forecast the worth of future write-offs/remissions. These are mixed to provide an estimate of how a lot PAYE Revenue Tax (at a UK stage) is anticipated to be remitted or written off in whole for the outturn 12 months. RTI PAYE knowledge is then analysed for every PAYE scheme with a write-off/remission to calculate what quantity of whole tax collected by these schemes is in respect of Scottish taxpayers.

RTI knowledge can be used to find out how the tax is distributed throughout tax bands for Scottish and rUK taxpayers.

For the 2020 to 2021 outturn, a slight adjustment to the methodology was utilized to estimate these uncollected quantities to account for the affect COVID-19 might have on the profile of write-offs associated to the 2019 to 2020 and 2020 to 2021 tax years.

The entire proportion of uncollected PAYE NSND Revenue Tax was assumed to be in-line with the quantities noticed in pre-COVID outturn figures.

7.5 Aid at Supply (RAS) pension reduction

When a person pays right into a pension scheme, the scheme treats this as being acquired web of fundamental charge tax and reclaims that fundamental charge tax reduction again from HMRC so as to add to the member’s pension pot.

This adjustment within the outturn calculation displays the fundamental charge tax being handed to the pension supplier and not held as Revenue Tax by the exchequer.

The RAS for pension contributions is calculated through the use of data from annual returns made by pension schemes which present the quantity of gross contributions made by scheme members within the applicable tax 12 months.

The proportion referring to Scottish taxpayers is calculated by figuring out particular person contributions made by scheme members who’ve a Scottish postcode held on the pension contribution knowledge.

7.6 Reward Help

When a taxpayer makes a charitable donation, the charity can declare fundamental charge tax reduction from HMRC on the worth of the donation.

This adjustment within the outturn calculation displays the fundamental charge tax being handed to the charity and not held as Revenue Tax by the exchequer.

Charities can again date claims for this fundamental charge tax by as much as 4 years. Subsequently, the worth which can in the end relate to a particular tax 12 months has been estimated utilizing earlier years knowledge.

The Scottish share has been estimated as a mean of Scotland’s share of the UK inhabitants and Scotland’s share of whole UK Revenue as measured by the SPI. Scottish circumstances have been recognized primarily based on postcode because the Scottish indicator didn’t exist earlier than SIT was launched.

7.7
HMRC RTI for PAYE methodology

The estimates in Desk 4 have been sourced from knowledge held on HMRC’s PAYE RTI administrative system. The RTI administrative system covers all people who’ve a dwell employment or occupational pension open on a PAYE Scheme.

Most individuals pay Revenue Tax via PAYE. That is the system that employers or pension suppliers use to take Revenue Tax and Nationwide Insurance coverage contributions earlier than they pay an worker’s wages or pension. An worker’s tax code tells the employer how a lot Revenue Tax to deduct.

Underneath RTI, employers are required to ship HMRC details about tax and different deductions made via the PAYE system each time an worker is paid. Since April 2014, all employers have been required to report in actual time via RTI. This gives HMRC with a really wealthy supply of knowledge, which can be utilized to raised inform public understanding of the labour market.

People who pay tax via the SA system are included in these statistics if they’re additionally employed and paid by way of PAYE. People with extra complicated monetary affairs (for instance the self-employed or those that have a excessive earnings) may pay or be refunded Revenue Tax and NI via SA. People in SA who aren’t within the PAYE system is not going to be included in these statistics.

Manufacturing of in-year monitoring of Scottish Revenue Tax withheld in RTI, offered in Desk 4 of this publication, has the next caveats:

the sum of those figures is not going to equate to the ultimate outturn and are solely supposed to be a sign of a part of the outturn (from employments coated by PAYE)

RTI knowledge doesn’t embrace all earnings reported via Self Evaluation reminiscent of income from self-employment or earnings from property and thus solely gives a partial image of NSND Revenue Tax liabilities in Scotland.
Revenue Tax due on different sources of earnings reminiscent of financial savings curiosity could also be collected via PAYE utilizing a course of often called coding out. This course of can be used to gather quantities due for some non-Revenue Tax expenses, such because the HICBC. Coded out tax quantities are included in RTI knowledge and subsequently seem in these figures

RTI knowledge in-year is topic to amendments all year long, and any end-of-year updates which will happen aren’t included
these figures are pre-reconciliation and provisional
the NPS flag is taken as a snapshot in time and which means that as taxpayers change residential handle throughout the 12 months, their standing and subsequently the figures might change

7.8 Revision in relation to non-resident taxpayers

In 2021, inconsistencies within the regional classification of a small variety of SA taxpayers have been found in HMRC’s NPS and SA methods.

These taxpayers had Welsh/Scottish residency flags in HMRC’s NPS data and have been thus recognized as Welsh/Scottish taxpayers for the aim of the Outturn.

Nonetheless, the flag indicator variable in HMRC’s SA database for these taxpayers confirmed as rUK. An examination of tax returns for a pattern of those people was performed and it was found that these taxpayers have been non-resident for tax functions.

It isn’t attainable to be a WRIT or SIT taxpayer whereas being non-resident so the NSND Revenue Tax income generated from these non-resident taxpayers ought to have been allotted to rUK.

The method of manufacturing the outturn figures has been revised for the 2020 to 2021 outturn. The figures from earlier outturn years have additionally been revised accordingly on this statistical launch.

Total, this results in a mean yearly discount of SIT outturn of £8.9 million (-0.08%) over the interval 2016 to 2017 to 2019 to 2020, for WRIT this represents a one-time discount of £1.5 million (-0.07%) in 2019-20.

By means of additional evaluation, we’ve got accounted for these changes within the Revenue Tax paid via Self Evaluation and PAYE (Desk 3) and the by band breakdown of NSND Revenue Tax (Desk 2).

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