Hundreds of Scottish civil servants avoid paying higher income tax by living elsewhere

Nearly 250 Scottish civil servants are able to avoid paying Scotland’s higher rate of income tax because they are based elsewhere, it has emerged.

The Scottish Government confirmed 241 of its employees pay income tax applicable to England, Wales or Northern Ireland rather than Scotland.

This includes seven senior civil servants, who will likely be on six-figure salaries and so will save thousands of pounds in income tax by living outside of Scotland.

Scottish Conservative MSP Jamie Greene | PA

From April, anyone earning more than £30,318 will pay more income tax in Scotland than if they lived down south. Someone earning £50,000 will pay £1,527 more, and a person earning £100,000 will pay £3,331 more.

Conservative MSP Jamie Greene said: “It should be a source of embarrassment to the SNP Government that a significant number of their own staff are saving cash by not paying Scottish tax, including several in the higher pay brackets who are considerably better off as a result.

“Many hard-working Scots, who are forced to pay more under the SNP, wish they were in a similar position.

“Whatever their reasons for living elsewhere in the UK, what incentive is there for Scottish Government staff to relocate to Scotland when it would mean handing over more of their hard-earned pay?

“You have to wonder how many other well-paid executives choose not to relocate to Scotland because of its harsh taxation system.”

The figures were revealed in a letter to Mr Greene from Permanent Secretary John-Paul Marks, Scotland’s most senior civil servant, after the Tory MSP asked about the issue during a meeting of the public audit committee.

Mr Marks said 97 per cent of the Scottish Government’s employees pay Scottish income tax, as of September last year. Of the 241 who do not, 55 were in C1, C2, or C3 pay bands, where salaries are between £57,701 and £87,404.

Mr Marks said a number of the individuals concerned “may have been in the process of relocating to Scotland at the snapshot date or may already have done so, but the Scottish Government had not yet received an updated tax code from HMRC”.

He added: “There is an expectation that individuals will relocate to live in Scotland if they are employed by us. However, this is not a legal requirement unless there is an occupational reason to reside within a certain travelling distance of the work place.

“Employees are required to attend their contractual work location in Scotland as required for business need. If they choose to commute a longer distance, that is a personal choice and, importantly, at their own expense.”

Mr Marks said there were “also instances where the Scottish Government work place is not located in Scotland”, adding: “For example, we have employees who work in our London and overseas offices.

“We also employ seafaring staff who work on our marine compliance vessels. It is a feature of the seafarers labour market for individuals to live some distance from the location of their work.”