Overpayment

[LiamD]

I was overpaid recently and have been asked to pay back, which of course I am more than happy to do so, the business are saying I need to pay the gross amount back and some sort of tax adjustment will see me pay less tax to get the amount I paid in tax returned to me over the repayment term - is it too much to expect the company to put into writing what the amounts equate to being deducted from my basic wage each month?

I spoke with HMRC who explained the simple solution of re calculating the correct pay and giving me a new pay slip and I agree to pay back the net amount and the company claim the tax difference back, so far I have revised to sign the agreement until I understand the terms of how I’m paying back which seems to equate to them thinking I’m being awkward

Has anyone been in a similar situation?

[Countdown]

LiamD said:

I was overpaid recently and have been asked to pay back, which of course I am more than happy to do so, the business are saying I need to pay the gross amount back and some sort of tax adjustment will see me pay less tax to get the amount I paid in tax returned to me over the repayment term - is it too much to expect the company to put into writing what the amounts equate to being deducted from my basic wage each month?

I spoke with HMRC who explained the simple solution of re calculating the correct pay and giving me a new pay slip and I agree to pay back the net amount and the company claim the tax difference back, so far I have revised to sign the agreement until I understand the terms of how I’m paying back which seems to equate to them thinking I’m being awkward

Has anyone been in a similar situation?

I oversee the Payroll team at our place and this is something that happens occasionally.. Based on what you've said the Company's Payroll "person" doesn't really know what they are doing. HMRC are correct - What the Company should do is as follows;

Work out your correct pay (Gross, Tax, NI, net)
Compare to your original payslip (Gross, tax, NI, and net)
Invoice you for the difference between the net pay you received and the net pay you should have received.
Recover the overpaid tax and NI from HMRC by processing "recovery of overpayment" in the next payroll run - this means that your NEXT payslip will have the correct figures on it
(alternatively they can reverse the incorrect month's payroll run and re-run it and it's as if the error never happened but this depends on how long ago the error happened and how lazy/competent the payroll person is)

[Beetnik]

The solution outlined by HMRC is the correct way. Depending on the amount involved we'd suggest either you remitting the difference back now or deducting it from next month's payment.

I own and run a payroll bureau.

[LiamD]

I should of mentioned when I put the hmrc solution to the person I was contacting they spoke to the payroll company zellis who suggested what I had said was out of process and that they would need a ccn if that’s some sort of common abbreviation

I’d also like to add that I asked for this a month ago and was flatly told this wasn’t possible, the latest convo I had with the site payroll is if I don’t agree to paying back under their terms they’ll just take the money

Edited by LiamD on Wednesday 10th March 14:23

[Countdown]

LiamD said:

I should of mentioned when I put the hmrc solution to the person I was contacting they spoke to the payroll company zellis who suggested what I had said was out of process and that they would need a ccn if that’s some sort of common abbreviation

I’d also like to add that I asked for this a month ago and was flatly told this wasn’t possible, the latest convo I had with the site payroll is if I don’t agree to paying back under their terms they’ll just take the money

Edited by LiamD on Wednesday 10th March 14:23

They are entitled to take the money. However it's odd that they don't just do that rather than asking you to repay. That would probably be easiest all round and wouldn't require any revised HMRC submissions

The HMRC isn't out of process. My guess is that Zellis want to charge your company extra for having to process a correction (and nobody at your Firm knows enough about Payroll to challenge them)

[LiamD]

I understand they can take it, the full amount is not a small amount it’s over 2000 so taking it all in 1 go could put me below min wage

[Jasandjules]

LiamD said:

I was overpaid recently

Then you send them back the overpayment. Simple as that.............. How they deal with tax/payroll is a matter for them.

[LiamD]

Thanks for the helpful reply, where exactly have I said I’m not prepared to repay? If wanting to be informed on the tax/NI/pension issues is so wrong, shoot me

[Jasandjules]

LiamD said:

Thanks for the helpful reply, where exactly have I said I’m not prepared to repay? If wanting to be informed on the tax/NI/pension issues is so wrong, shoot me

Sorry I think you have the wrong end of the stick. My point was that they have overpaid, you pay them back the sum they have overpaid. How/what tricks they want to play with tax is not a matter for you to be concerned about or to get involved in, you have no need to waste your time or effort trying to wangle all sorts of strange things with your tax etc.

As in, simply put, that is all their problem not yours.

[LiamD]

Apologies - I’m concerned regarding the tax as they’re asking me to pay a gross amount when I received a net amount so would like the figures of what I can expect to see returned to me seeing as the business says it can’t be done the way hmrc and a few members here suggest