Scotland’s largest teaching union has written to UK officials seeking repayment of tens of millions of pounds it claims teachers are collectively owed due to an “unfair” discrepancy in how some teachers were taxed on a recent pay settlement.
Because Scottish tax rates increased in 2023-2024 and some local authorities did not release backdated payments for a 2022-2023 pay rise until the 2023-2024 tax year, teachers in 16 council areas were taxed more than their colleagues.
The Educational Institute of Scotland (EIS) is now calling on the UK Government to “resolve this issue as a matter of urgency by ordering the repayment of overpaid tax to the thousands of Scotland’s teachers who are owed it.”
Following a pay dispute from December 2020 until March 2023 and teacher strikes that closed schools for multiple days in 2022 and 2023, unions and local authorities agreed to a 14.6% uplift in March 2023.
The deal included a 7% uplift backdated to April 2022, with the rest of the pay rise staggered across April 2023 and January 2024.
However, the 7% backdated for April 2022 has proven controversial. Although many local authorities distributed backdated pay before the end of the 2022-2023 tax year, 16 local authorities said that the terms of the pay deal were finalised too late to be included in the 2022-2023 term.
The local authorities who originally said in 2023 that they would not be able to process the pay uplift in the 2022-2023 window included some of the largest school estates, such as Glasgow City, Highland and Aberdeenshire.
In these cases, local authorities paid out the pay rises during the 2023-2024 tax year, which coincided with changes in the Scottish tax rates.
According to calculations by the EIS, the country’s largest teachers’ union, teachers with a standard tax code at the top of the main grade salary scale paid £382 more than they would have the previous year.
EIS officials have been in contact with Cosla and HM Revenue & Customs (HMRC) since 2023 over concerns that as many as 20,000 teachers were being impacted.
Read more
- Only 40 per cent of S4 pupils pass National 5 maths, figures show
-
Fears music lessons could be ‘soft target’ for council spending cuts
-
Half of residents could leave south of Mull over new high school plans
EIS officials reported that many teachers submitted individual requests to HMRC to reallocate their backpay to the 2022-2023 tax year. Some were successful and received a repayment, but the EIS said that others were told that any adjustments would have to come from their local authority.
Believing the situation has now reached an impasse, EIS General Secretary Andrea Bradley wrote a letter directly to James Murray MP, Exchequer Secretary to the Treasury, calling for the UK Government to intervene.
“From April 2023, thousands of EIS members, across 16 local authorities, have suffered significant financial disadvantage as a result of the delay in receiving backpay through no fault of their own.
“Since first being made aware of the issue in April 2023, the EIS has repeatedly attempted to seek a resolution. Thus far, however, neither HMRC nor the 16 local authorities in question seem willing to rectify what are scandalous detriments to thousands of Scottish teachers.”
She added that the EIS believes teachers are owed a cumulative total of “tens of millions” of pounds.
A spokesperson for HMRC said that it is up to employers, in this case local authorities, to consider when payments to employees should be subject to pay as you earn (PAYE).
“We (HMRC) have a legal duty to collect taxes to ensure fairness for all taxpayers.
“It is an employer’s duty to consider the tax implications when making payment awards to their employees and ensure PAYE is accounted for correctly.”
Cosla has also been approached for comment.
The 2022-2023 pay settlement marked the end of the most contentious pay dispute in recent decades. For the first time since the 1980s, Scotland faced widespread teacher strikes as members of the EIS, NASUWT, and the Scottish Secondary Teacher’s Association (SSTA) unions took part in rolling strike actions in the autumn and winter of 2022 and 2023.
Even after the dispute was settled, however, the financial consequences of the pay deal continued to impact policy and negotiations across the education sector.
In late 2023, Scottish Government ministers announced they would roll back a planned £46 million investment in colleges and universities.
Ministers repeatedly suggested that this decision was necessary to fund the 2022-2023 teacher pay deal.
Share