HMRC have advised that they are aware of an issue which is under urgent investigation whereby customers who are expecting to receive the new Scottish S code for employees, are not seeing this information when downloading into their third party software. As soon as HMRC have the fix and recovery solution confirmed HMRC will update you.
Comment
We are less than 4 weeks away from the introduction of the new “S” prefix tax codes and already there are issues. We have known about the “S” prefix codes for some years – I shall refrain from comment.
As we go round the country delivering our courses, we have been advising employers to check the P9 coding notices to ensure that employees living/residing in Scotland have the “S” prefix to their codes. But importantly advising them to check that they do not have “S” prefix codes for employees who they know are living outside Scotland because there is a lack of clarity on the part of HMRC about exactly how they deal with change of address information supplied by employers. In theory, HMRC should have been updating employee address information provided by the employer for the last year, but feedback from employers does not always support this. Additionally, HMRC were supposed to have written to all people they believe to be Scottish taxpayers last December, but I was with an employer who processes a medium sized Scottish payroll last week and they reported that none of their employees had received letters to confirm they were Scottish taxpayers.
So, why is it important to check P9 coding notices? An employer based outside Scotland could easily recruit a new employee and relocate them to England, Wales or N Ireland.
