Taxman looking set to bring council to book

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Scottish Borders Council could be facing a six-figure bill from Her Majesty’s Revenue & Customs (HMRC) because of a tax bungle.

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

The Wee Paper understands a routine audit by HMRC found the council, among 4,300 employers in Scotland and 50 in the TD postcode, identified that had discrepancies in its compliance with the new tax legislation.

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

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

The council said it could not comment on an ongoing matter, but added: “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.”

Selkirkshire 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.”

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