Some employers have been applying Scottish PAYE codes to Welsh taxpayers in error. The Welsh Assembly have blamed this error on HMRC. HMRC's Jim Harra has responded to say that HMRC is not at fault.

Scottish Income tax rates are now different to UK rates and Sottish taxpayers' PAYE codes are suffixed with a S.

Although Welsh Income tax rates applies from 6 April 2019, the Welsh tax rates and bands are currently the same as England and Northern Ireland. Following the introduction of devolved income tax Welsh employees who are Welsh taxpayers should be on a PAYE code which is suffixed with a C. 

According to various reports some Welsh taxpayers have discovered that they are on the Scottish code, others have noted that they are on the code for England. This has been blamed on HMRC.

HMRC's Jim Harra has responded to Llyr Gruffydd AM, Chair of the Finance Committee of the National Assembly for Wales defending allegations of HMRC fault:

"We are confident that HMRC sent correct ‘C’ codes to employers for Welsh taxpayers. It is possible that some taxpayers resident in Wales have not yet received a ‘C’ code, where they have only recently moved to Wales or where they have not updated their address details with HMRC. This will always be true for new Welsh taxpayers and HMRC systems will pick them up and apply the correct code as soon as possible."

"However, we have been made aware that some employers have not correctly applied the ‘C’ codes that HMRC has provided. HMRC has engaged with extensively employers and payroll software providers throughout preparations for the introduction of Welsh rates of income tax (WRIT), using our established communication channels and bespoke presentations. We provided technical specifications and test services to ensure employers and payroll software providers had all the information they needed."

Comment

It seems to the case that some employers have confused Scottish PAYE codes with Welsh and it may also be the case that some Welsh taxpayers have not been correctly captured on HMRC's systems. In the case of the former, affected employees may have paid a small amount of extra tax in the weeks/month affected and in the case of the latter there will not be any difference in the amount of tax deducted.

Topical guides

What is the 2019-20 PAYE Code?

Welsh Income Tax

Scottish Income Tax

External links

HMRC: PAYE tax codes to use from 5 April 2019 

HMRC: Letter Jim Harra to Llyr Gruffydd AMLlyr Gruffydd AM

 

 

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