Council facing tax fine

A tax bungle could cost Scottish Borders Council a six-figure bill from Her Majesty’s Revenue & Customs (HMRC).

Since April 2013, under a new tax system called Real Time Information, employers must declare how much they pay their employees, whether it’s weekly, monthly or quarterly, and pay PAYE to HMRC by a deadline.

The Southern understands a routine audit by HMRC identified discrepancies in SBC’s compliance with the new tax legislation, among 50 other employers in the TD postcode,

As a consequence, SBC could be liable to pay not only the PAYE tax due, but also interest since it should have been paid, plus a surcharge for paying late.

HMRC has not yet confirmed the size of the back tax, interest and penalty, but The Southern believes SBC estimates place it in six figures, around £160,000.

The council said: “We are currently engaged with HMRC as part of a compliance review. To date we have had no formal response from HMRC that indicates that there will be any fine imposed on the council.”

Councillor Michelle Ballantyne, who heads SBC’s audit body, told us: “Taxpayers have been let down again as interest payments and surcharges just suck money away from service delivery. This appears to be a failure to get contracts right and it raises questions about the accountability of those whose responsibility it is.”