Taxed on a refund?

[BrettMRC]

Bit of an odd one, (well for me anyway)...

One of my cars was funded via salary sacrifice, BIK paid etc.

At the end of the term it was returned substantially under the mileage and so I was issued a refund back into my salary.

The question is, what tax should I pay on the refund?

Thanks

[anonymous-user]

I'll start with saying it would be the difference between the tax you would have paid if you had taken that money as straight pay and the tax you paid on the money that went to the car provider that has now been refunded

but more informed people may be along soon

[BrettMRC]

Pretty much what I thought... looks like they have taken a nice round 50% though

[anonymous-user]

Is there some national insurance in there as well?

[BrettMRC]

Yep - I think I've paid the usual tax/ni on it, but the BIK already payed not been taken into account.

Suspect it will not be worth the call to HMRC in terms of time on hold vs sanity.

[Welshbeef]

BrettMRC said:

Pretty much what I thought... looks like they have taken a nice round 50% though

Well if you are a 40% tax payer then it’s 40%+12% Employee NI plus you may have some pension payment to it

[BrettMRC]

12% up to a point, then 2%...

Seems like its probably only about 8% out in terms of tax paid on the refund. (Which I'm sure HMRC will gladly sort out for me in future)

[anonymous-user]

I'd start with a call to whoever administers your payroll

[Welshbeef]

BrettMRC said:

12% up to a point, then 2%...

Seems like its probably only about 8% out in terms of tax paid on the refund. (Which I'm sure HMRC will gladly sort out for me in future)

True.

Could also be higher clawback of child allowance