Written Question · S5W-18377 · Session 5
what its response is to concerns that its 2018-19 income tax policy has led to a possibility that an estimated 900,000 people on the inter…
The question
To ask the Scottish Government what its response is to concerns that its 2018-19 income tax policy has led to a possibility that an estimated 900,000 people on the intermediate income tax band are at risk of spending a portion of their pension savings due to the 1% relief above the initial 20% being included in take-home pay as opposed to it being paid directly into their pension pots.
The answer
The Scottish Government supports pension saving. That is why the Scottish Government negotiated with the UK Government to ensure that in the current tax year relief at source would continue to be available to Scottish income taxpayers on exactly the same basis as is the case elsewhere in the UK.
The operation of relief at source, as with all income tax reliefs, remains reserved and therefore a matter for HMRC and the UK Government. However, income taxpayers in Scotland who fall into the intermediate band and are contributing to a pension will have their pension contributions grossed up so that the 20% basic rate tax paid on the contribution is also paid into their pension by HMRC. They can then claim any additional relief they are due back from HMRC.
The operation of relief at source, as with all income tax reliefs, remains reserved and therefore a matter for HMRC and the UK Government. However, income taxpayers in Scotland who fall into the intermediate band and are contributing to a pension will have their pension contributions grossed up so that the 20% basic rate tax paid on the contribution is also paid into their pension by HMRC. They can then claim any additional relief they are due back from HMRC.
In the Official Report
No contribution in the Official Report cites S5W-18377 by reference.