Welsh workers pay Scottish income tax in payment mix-up

15 May 2019


BBC News has reported that a number of workers in Wales have paid the wrong amount of income tax after Scottish rates were applied instead.


According to the report it isn’t known exactly how many workers have been affected by the mistake.


Apparently HMRC has said that the error was down to employers entering an S code for Scotland, which means some paid too much tax and others not enough, due to the divergence in rates and thresholds.


There is very little detail in the report which says that a statement by HMRC said:


"We have been made aware of an error in the application of new income tax codes for Welsh taxpayers by some employers which has meant some taxpayers paid the incorrect amount of tax in April.”


On Tuesday 14 May the CIPP and other stakeholders were informed by HMRC’s Software Developers Support Team (SDST) that a small number of employers had been identified as not operating PAYE correctly for their Welsh employees.


Specific to payroll software developers, we were told that the issues identified so far include:


  • Welsh employees being reported on an FPS with no C prefix within @TaxRegime.
  • Welsh employees being reported on an FPS with an S prefix within @TaxRegime. The S prefix should only be used for individuals liable to Scottish income tax.