Scottish S tax code hits P9 coding out problem with HMRC IT glitch

10 Mar 2016

In the run-up to the introduction of the Scottish S code for Scottish resident taxpayers from 6 April under the new Scottish rate of income tax (SRIT) regime, employers are experiencing a technical problem uploading data through payroll software in the annual coding run, reports Sara White

This means that employers are unable to comply with HMRC requirements under the annual coding run – P9 regime – which enables employers to revise employee codes in time for the start of the new tax year on 6 April.

HMRC has confirmed that it is ‘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’.

The tax authority is working to resolve the IT problem affecting the annual coding run (P9) and said that as soon as it has a fix and recovery solution it will confirm that the issue is sorted via an online update on gov.uk service availability updates.

When the new tax code comes into force on 6 April, up to 2.6m Scottish resident taxpayers will be defined as S code taxpayers. This information will appear on PAYE payslips for payment periods post the new tax year 2016/17 which starts next month.

It is the responsibility of individuals, not employers, to alert the HMRC that they are defined as Scottish taxpayers. All affected taxpayers should have been contacted before Christmas last year to confirm that they will become a Scottish S code taxpayer, although there were delivery problems and many taxpayers have complained that they did not receive the notification.

The SRIT has been set at 10p, meaning that there will be no change to actual income tax rates for tax year 2016/17.

Check out progress on the fix at HMRC Pay As You Earn (PAYE): service availability and issues