On 6 April 2016, a fundamental change was made to the taxation system for Scottish resident individuals.

The main UK rates of income tax were reduced by 10p for Scottish taxpayers and in its place the Scottish Rate of Income Tax (SRIT) was applied equally to all Scottish taxpayers. As the SRIT was set at 10p, the overall income tax rates are currently the same as in the rest of the UK. So, those who are resident in Scotland are currently liable to two types of income tax and pay SRIT at 10% on most mainstream sources of income such as PAYE income, pensions, rental profit and profits from self-employment.

The SRIT does not apply to income from savings such as building society interest or dividends. These rates are the same for all taxpayers across the UK.

The SRIT is in place for one transitional year and will no longer apply from 6 April 2017 as the Scottish Government have exercised their powers to set the tax rates and bands (excluding the personal allowance) on non-savings, non-dividend income of Scottish taxpayers.