Wrong tax codes being used for some Welsh workers.

[joglynne]

Not sure where to post this item. I know we have some Welsh members so thought I would bring the following Tax issue to their notice. Sorry if this is already a well known issue and also for the long post.

From April 2019, Welsh taxpayers were assigned new income tax codes beginning with the letter 'C'. However, HMRC recently revealed that some Welsh taxpayers were mistakenly given Scottish income tax codes by their employers. As a consequence, Welsh taxpayers have been charged income tax using the Scottish income tax rates and bands.

For 2019/20 the Welsh rate of income tax is set at 10% and this is added to the UK rates, which are each reduced by 10%. Therefore, the overall tax payable by Welsh taxpayers continues to be the same as English and Northern Irish taxpayers.

The income tax rates and bands that apply to employment income, self-employed trade profits and property income are different for taxpayers who are resident in Scotland, with tax rates and bands ranging from 19% to 46% rather than the 20% to 45% which apply across the rest of the UK. Tax codes for Scottish taxpayers begin with the letter 'S'.

HMRC stated that it does not know the full extent of the error or how many Welsh taxpayers have been affected but they will carry out a review of the operation of Welsh tax codes in June 2019.



Llyr Gruffydd, Chair of the National Assembly for Wales' Finance Committee, said:

'We raised concerns about the flagging process for identifying Welsh taxpayers during our enquiries into fiscal devolution and the Welsh government's draft budget.

'On each occasion, we were told the matter was in hand, and the lessons from the devolution of income tax powers to Scotland, where there were similar issues, had been soundly learned and would be put into effect. We are seeking an immediate explanation of how this has happened and will be asking representatives from HMRC to appear before this Committee in the near future.'

This is the link to a PDF of the letter sent by the Welsh Assembly to HMRC which could be worth reading if you think you may be effected by the incorrect tax code being used by your employer and want to check/correct whether you are paying too much tax.

https://assets.publishing.service.go..._Committee.pdf

[Russ]

Don't worry, there's not a man in the country who hasn't already checked

[joglynne]

I certainly hope so Russ.

I guess that, having been a Civil Servant for so many years, I am just sceptical when it comes to believing that employers will bother to review their payrolls, or that HMRC will do a thorough check that the correct revised tax codes are being used, until they are forced to do so.

[Escapee]

I think they did this on purpose as a warning of what to expect when the Welsh Labour run Welsh Assembly uses its power to vary the rate of income tax.