Tax codes alert

The recent revelation that some Welsh taxpayers have been paying the wrong amount of income tax after Scottish tax rates were applied to them shows just how important it is to check tax codes.

The blame has been laid at HMRC’s door, although it says that the error arose because the employers entered an S code for Scotland, rather than the C code used for Welsh taxpayers. In broad terms, Scottish and Welsh taxpayers are categorised by where they live, so problems can also arise when people move. Welsh income tax rates have applied from 6 April 2019, although rates and bands are currently the same as England and Northern Ireland.

Employers should ensure they are using the latest version of their payroll software. Once tax codes are corrected, any errors in the amount of tax paid will then automatically be put right without the taxpayer needing to take any action.