Taxes & Tipping

Paying taxes is nothing new, but may be a bit different here in Scotland. Find an over view of taxes and tipping etiquette below.

“Value Added Tax”, a sales tax (currently around 15%) imposed on nearly everything.  But it is usually already included in the price you see–most places.  If it is not included in the price, it should clearly state “plus VAT” below the price listed.  For more information on the VAT tax, click here.

Filing US Taxes

  • “United States citizens living abroad are required to file annual U.S. income tax returns and report their worldwide income if they meet the minimum income filing requirements for their filing status and age.” (as stated here).  To see the guidelines for minimum income, go here.
  • The best resource to answer your questions about taxes while living abroad can be answered in Publication 54 (2007), Tax Guide for U.S. Citizens and Resident Aliens Abroad
  • If you have worked outside the US and also paid taxes see Publication 514, Foreign Tax Credit for Individuals.
  • Being out of the country has its advantages!  See this statement about when taxes are due for those out of the country as found on Form 4868 about filing an extension: Taxpayers “out of the country.” If, on the regular due date of your return, you are “out of the country” and a U.S. citizen or resident, you are allowed 2 extra months to file your return and pay any amount due without requesting an extension, so typically June 15.  If you owe money, you will have to pay interest on those 2 months which you did not pay your taxes.
  • However, be sure to check for the specific rules about if and when taxes are due for your specific state if you are out of the country.

There are no standard tipping practices in Scotland. These are just some basic guidelines.

  • Hairdresser – A pound or two in addition to the cost of the service is adequate.
  • Server – Tipping is not expected but 10-15% above the price of the meal is sufficient if the service was outstanding.
  • Cab driver – An additional 10% added to the fare is more than adequate.  But be careful!  Some cab drivers will add it in automatically!
  • Bartender – Tipping is appreciated if the bar is busy. £1 per round is sufficient.

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