Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • AdrienneMa
    • By AdrienneMa 19th Jun 17, 11:43 AM
    • 2Posts
    • 0Thanks
    AdrienneMa
    tax paid on SMP paid in a lump sum
    • #1
    • 19th Jun 17, 11:43 AM
    tax paid on SMP paid in a lump sum 19th Jun 17 at 11:43 AM
    Hello,

    I hope someone can help me.
    I have been on.mateenity leave since December 2016 and I left work (resigned) on 14th March.
    The remaining weeks of my SMP were paid in a lump sum at the end of the month. Because my annual income was over the personal allowance, they took tax on the whole amount. About £3000 was supposed to be in the next rax year 17/18 but because it was actually paid in 16/17 I lost out on £600.
    HMRC cannot help and former employer believes there is nothing he could do. Is there really no way of getting the tax back?
    It was basically a prepayment of an income due in 17/18. Could this not be taken into account?

    Thank you in advance.
Page 1
    • Caz3121
    • By Caz3121 19th Jun 17, 12:13 PM
    • 10,470 Posts
    • 6,859 Thanks
    Caz3121
    • #2
    • 19th Jun 17, 12:13 PM
    • #2
    • 19th Jun 17, 12:13 PM
    were you given any options regarding receiving the remainder of your SMP?
    .gov guidance for employers (there is a section on statutory maternity)
    https://www.gov.uk/employee-leaving
    have you calculated the tax due v's tax paid for the entire tax year?
    • AdrienneMa
    • By AdrienneMa 19th Jun 17, 1:14 PM
    • 2 Posts
    • 0 Thanks
    AdrienneMa
    • #3
    • 19th Jun 17, 1:14 PM
    • #3
    • 19th Jun 17, 1:14 PM
    No, I wasn't given any option. When I receiced my payslip I did ask them if this could be changed. They said as I left the company they could not keep me on the payroll system anymore hence it should be paid in a lump sum (first they didnt even know it has to be paid even if i leave)
    • polymaff
    • By polymaff 20th Jun 17, 12:02 PM
    • 1,552 Posts
    • 667 Thanks
    polymaff
    • #4
    • 20th Jun 17, 12:02 PM
    • #4
    • 20th Jun 17, 12:02 PM
    ... I left work (resigned) on 14th March.
    Originally posted by AdrienneMa
    There's the problem.
    • sheramber
    • By sheramber 20th Jun 17, 12:09 PM
    • 3,250 Posts
    • 2,476 Thanks
    sheramber
    • #5
    • 20th Jun 17, 12:09 PM
    • #5
    • 20th Jun 17, 12:09 PM
    Tax is charged in the year the payment is made.

    The only way the SMP could be taxed in 2017/18 would be if you had remained on the books into that year and the payments were made in that year.
    • daisy23169
    • By daisy23169 22nd Jun 17, 9:57 PM
    • 27 Posts
    • 13 Thanks
    daisy23169
    • #6
    • 22nd Jun 17, 9:57 PM
    • #6
    • 22nd Jun 17, 9:57 PM
    Out of interest, why did you resign? If you just weren't planning to return you could have resigned at the end of your mat leave and accrued annual leave all the way through (as well as avoiding this tax situation). I don't understand the logic of resigning so early on in your mat leave so I'm really just hoping you haven't resigned in order to start working for a new employer, as that would cease your entitlement to SMP anyway.

    Unfortunately the tax is correct, as sheramber has explained, so HMRC won't refund. Your payroll team haven't acted incorrectly either - if you're leaving the business then they're perfectly entitled to pay up the remainder of your SMP entitlement as a lump sum and process you as a leaver.

    It was just incredibly unfortunate timing of your resignation really
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

3,760Posts Today

7,125Users online

Martin's Twitter