Council faces late tax fine

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A tax mistake could be about to land Scottish Borders Council with a six-figure bill from Her Majesty’s Revenue & Customs (HMRC).

Since April 2013, under a new tax system called Real Time Information, employers are obliged to declare how much they pay their 
employees, whether that is weekly, monthly or quarterly, and pay PAYE (Pay As you Earn) to HMRC by a certain deadline.

It is understood that a 
routine audit by Revenue and Customs identified discrepancies in the Council’s compliance with the new tax legislation, along with 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 it is believed that 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, said: “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.”