Created on: 03 Nov 2025
As members will be aware, the EIS wrote again to HM Treasury in October 2025 regarding the failure of 15 of Scotland’s local authorities to adjust payroll records for the tax years ended 5 April 2023 and 5 April 2024.
This letter was in response to a reply to previous correspondence, from HM Treasury to the EIS, where it was made clear that HMRC would provide guidance to the local authorities in question.
Following the sharing of the guidance with local authorities, the EIS accepted an offer to meet with HMRC and accordingly a meeting took place between EIS Officials and HMRC in July 2025.
In this meeting, HMRC stated that they have the power to require employers to amend PAYE end of year returns but believed that there may be insufficient grounds for such an undertaking.
At the request of EIS Officials, HMRC agreed to carry out more scoping work; however, no further communication was received from HMRC in the months following the meeting in July 2025.
This lack of communication led to the EIS writing again to HM Treasury, in October 2025, requesting direct intervention from the Chief Secretary to the Treasury to ensure that the 16 local authorities in question corrected the treatment of the 2023 and 2024 tax years covered by the SNCT Pay Award reached in March 2023.
Late last week, the EIS received a letter from HMRC, stating first that HM Treasury had passed the latest EIS correspondence to them. In the letter received last week, HMRC set out their position that "the pay awards were correctly taxed in 2023-24 and no refunds were due."
HMRC go on to state that they have "seen no evidence that employees were entitled to the payment in the 2022-2023 tax year" with their reasoning being that "the pay award negotiations did not stipulate an agreed pay day on which employees must be paid."
As well as being a source of extreme frustration given the time lag, the contradictory advice that HMRC has provided, and the fact that some teachers have been refunded the overpaid tax by HMRC, the EIS believes that the latest position outlined by HMRC must be challenged in any way possible.
Accordingly, the EIS is seeking urgent legal opinion with a view to mounting such a challenge.
Members should also be aware that the EIS Salaries Committee had approved a political strategy to put pressure on local authorities to adjust payroll records.
In light of last week's developments, this strategy may now require to be revised, depending on the further legal opinion that we receive.
Redress of this unjust situation remains a key priority for the EIS and members will be updated as soon as possible in the coming days and weeks.
In solidarity,
Andrea Bradley
EIS General Secretary