Scottish Rate of Income Tax and Relief at Source

28 November 2016

As a consequence of Scottish Rate of Income Tax, Pension Scheme Administrators (PSAs) will be required to operate the correct rate of Relief at Source (RAS) depending on whether their scheme member is a resident of Scotland or the rest of the UK from the tax year 2018/2019 onwards. 

The current Relief at Source Process is outdated and HMRC would like to encourage PSAs to communicate with us using automated and updated methods as we also want PSAs to submit their annual return to us digitally. 

To ensure PSAs use the correct rate of RAS from 2018/2019 onwards, we want to provide an automated process where HMRC will notify the correct rate of RAS for PSAs in the January to use in the following tax year.  Additionally, we also need to provide the correct RAS rate for any new scheme member if they joined the scheme after we gave out the bulk RAS rate report.  This will be a digital look up service for the PSAs to utilise.

Along with all of the above, there will be some additional messaging between HMRC and PSAs that will be required. HMRC have an API strategy and we would hope that strategically we can encourage PSAs to use an API service.

HMRC would like to give 3rd Party Software Developers the opportunity to explore whether there is a market for this service and would welcome your feedback and whether you would like to register your interest for providing this functionality to your users.

Please email the Software Developers Support Team at Email: sdsteam@hmrc.gsi.gov.uk with your feedback.