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Chamber and committees

Official Report: search what was said in Parliament

The Official Report is a written record of public meetings of the Parliament and committees.  

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Dates of parliamentary sessions
  1. Session 1: 12 May 1999 to 31 March 2003
  2. Session 2: 7 May 2003 to 2 April 2007
  3. Session 3: 9 May 2007 to 22 March 2011
  4. Session 4: 11 May 2011 to 23 March 2016
  5. Session 5: 12 May 2016 to 5 May 2021
  6. Current session: 12 May 2021 to 20 May 2025
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Displaying 2702 contributions

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Public Audit Committee [Draft]

“Administration of Scottish income tax 2023-24”

Meeting date: 26 March 2025

Graham Simpson

Okay. On 11 March, you wrote the committee a useful letter in which you addressed the issue of employers not applying S codes. We are talking about a small number of employers; in your letter, you mention that two employers are “consistently” getting this wrong. You obviously do not say who they are—and I am not asking you to name them, as you will not do that—but can you tell us what size those companies are? Why are they getting it wrong? You also refer to software in your letter. Are they now getting it right?

Public Audit Committee [Draft]

“Administration of Scottish income tax 2023-24”

Meeting date: 26 March 2025

Graham Simpson

We will take whatever you can tell us.

Public Audit Committee [Draft]

“Administration of Scottish income tax 2023-24”

Meeting date: 26 March 2025

Graham Simpson

Let us talk about S codes. For some reason, you do not have to tell HMRC where you live. Should it be a legal requirement to tell HMRC, given that we have tax divergence?

Public Audit Committee [Draft]

“Administration of Scottish income tax 2023-24”

Meeting date: 26 March 2025

Graham Simpson

But you have not done that yet.

Public Audit Committee [Draft]

“Administration of Scottish income tax 2023-24”

Meeting date: 26 March 2025

Graham Simpson

That is very much appreciated. However, the potential losers are not the companies, but the employees themselves. If they get taxed at the wrong rate, you will end up chasing them, and it is not their fault.

Public Audit Committee [Draft]

“Administration of Scottish income tax 2023-24”

Meeting date: 26 March 2025

Graham Simpson

That is very useful.

I will ask you about something else: self-assessment. I hate filling in any kind of form—I do not know why you would fill in a form if you did not have to do it—but a number of people on PAYE fill in self-assessment forms even though they do not have to, which they perhaps do not realise.

According to the Auditor General, no taxpayers have paid the incorrect tax as a result of that situation, but it led to HMRC overstating the Scottish income tax outturn by an average of £78 million a year. It is calculated that the Scottish budget should have undergone further negative reconciliation of £29 million as a result of that issue. Have any decisions been made on how to account for the potential £29 million reduction to the Scottish budget?

Public Audit Committee [Draft]

“Administration of Scottish income tax 2023-24”

Meeting date: 26 March 2025

Graham Simpson

Thank you.

Public Audit Committee [Draft]

“Administration of Scottish income tax 2023-24”

Meeting date: 26 March 2025

Graham Simpson

And more money.

Public Audit Committee [Draft]

“Administration of Scottish income tax 2023-24”

Meeting date: 26 March 2025

Graham Simpson

HMRC starts its work when the Scottish Government announces its intentions on tax, so I think that what the convener was getting at is that, after you have done all your preparatory work, the Government’s final decision might be different from what was originally proposed. In those circumstances, how quickly can you turn things around and change what you have done?

Public Audit Committee [Draft]

“Administration of Scottish income tax 2023-24”

Meeting date: 26 March 2025

Graham Simpson

That would be a big change.