Her Majesty’s Revenue and Customs has admitted that some Welsh taxpayers were deducted the wrong amount of income tax in April because they were coded for Scottish rates of tax.
Since the start of last month, all Welsh taxpayers should have a C for Cymru in their tax codes but HMRC say some employers incorrectly gave Welsh taxpayers tax codes with S for Scotland instead.
The codes make it possible for the Welsh and Scottish governments to set different income tax rates to the ones that apply in England. At present, the Welsh rates are still the same as England but in Scotland, there’s a “starter rate” of 19p in the pound. That’s 1p below the standard rate but better paid Scots face tax bands which are 1p higher than in Wales and England.
HMRC say any errors in the amount of tax paid will be automatically put right without the affected taxpayers taking any action. It said it already had plans to make sure that the new Welsh tax code was working properly, which will be implemented next month.
The Chair of the Assembly’s Finance Committee says he’ll be demanding that HMRC appears before AMs to explain what went wrong.
Llyr Gruffydd said his committee had been frustrated that the UK Government, which is responsible for HMRC, wouldn’t give evidence to AMs.