HMRC apologises after giving out wrong tax code - leaving some owing money

16 January 2024 , 10:12

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Some Scottish taxpayers were given an English tax code (Image: peter dazeley)

HMRC has apologised after some Scottish taxpayers were mistakenly given English tax codes.

The issue affected around 30 residents living in the newly built Taylor Wimpy estate in Mauricewood, north of the Scottish town Penicuik. One resident, who had moved from Edinburgh, said that the mistake meant they had underpaid his tax and needed to now pay an extra £10 a month to make up the difference.

After moving to the estate, the resident noticed a change in their tax code as didn't have the Scottish "S" at the beginning. This would mean HMRC would consider the tax as being paid in England. After asking around, they realised other people on the estate had the same issue.

HMRC said it would be contacting anyone who has underpaid or overpaid due to the error. The resident said they wanted to make the issue public and reported the issue to The National publication as they were concerned it could potentially be widespread across the English/Scottish border and that the Scottish Government was being "short changed" for income taxes. However, HMRC noted that the Scottish Government tax take was not impacted.

Even though both countries are in Great Britain, Scotland and England have different rates of income tax and depending on your earnings, you can pay more or less tax on where you live.

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According to the Chartered Institute of Taxation, if a worker was earning £27,850 a year last year then they would pay the same amount of Income Tax in both Scotland and England. However, those earning less would pay less tax in Scotland than in England and those earning more would pay more.

HMRC said the issue has now been resolved and that those affected have been contacted to inform them that they either owe money, or are due a tax rebate for overpaying.

A spokesperson for HMRC told The Mirror: “We’ve corrected the tax codes of residents from the estate and we apologise to those affected. Any overpaid or underpaid tax will be refunded or collected via PAYE as normal. People can check their code on the free HMRC app and online and if they think they’re on the wrong tax code, they should tell us by using their online personal tax account.”

Ruby Flanagan