The error is affecting both those filing self-assessment forms and those on PAYE

The taxman has mistakenly classified at least 30,000 Scottish residents as living in England in an error that will lead to taxpayers being wrongly charged and the Scottish government being deprived of vital public funds.

A host of professional accountancy bodies, including the Institute of Chartered Accountants of Scotland and the Institute of Chartered Accountants in England and Wales, have contacted HMRC with examples of taxpayers being labelled as living in the wrong country. Scottish accountancy bodies say they have also met the Scottish government to discuss the issue.

The error is affecting both those filing self-assessment forms and those who pay tax via their employer. At one large regional council as many as one in five workers are believed to have been wrongly designated