MSPs hit by unexpected tax bill

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Scores of MSPs are facing an unexpected tax bill following an error in the Scottish Parliament's computerised expenses system.

Holyrood officials wrote to MSPs warning them that they could have unpaid taxes dating back to April 2005.

A total of 107 politicians have been affected by the problem which was only discovered last month.

It is not known how much the MSPs will owe but they have been advised to contact HM Revenue and Customs.

The problem occured after changes to the computer software meant the parliament's expenses system no longer identified and incorporated the tax on business mileage in monthly PAYE calculations.

The parliament's expenses system was supplied by the firm Premier Envoy Ltd.

Graham Whitehouse, the firm's general manager, said: "The error was only discovered in February 2007 by the parliament during part of an unrelated exercise it carried out.

"As soon as we were alerted, we agreed immediately to take action to correct the issue.

"We are concerned that this was not identified during our testing and apologise for the inconvenience caused to MSPs."

Tax liability

A Scottish Parliament spokesman said Premier Envoy Ltd had agreed to change the software to rectify the problem. This will be done on 2 April, the start of the new tax year.

The spokesman said: "We are able to confirm that we have informed all members affected that they have an unpaid tax liability on business motor mileage claims dating from the 2005/06 financial year.

"We have also advised HM Revenue and Customs and it will now be a matter for each member to discuss their individual tax affairs with the Revenue, like any other taxpayer."