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    • hank_scorpio
    • By hank_scorpio 12th Jul 17, 1:54 AM
    • 14Posts
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    hank_scorpio
    Resigned. Overpaid. Need help with tax calculations.
    • #1
    • 12th Jul 17, 1:54 AM
    Resigned. Overpaid. Need help with tax calculations. 12th Jul 17 at 1:54 AM
    Hi everyone. Looking for some clarity.

    Resigned from job with immediate effect in middle of May. Got paid 2 days later as per normal process where everyone gets paid on the 18th of every month. My May pay packet included last years performance bonus.Ex employer write to me advising they have overpaid me by £180 as they paid me for the whole of May by mistake and not half of May as they were not advised I was a leaver. They want the money back or otherwise it's a ccj. Yada yada...

    Anyway, they have sent me this new mocked up May payslip where they show their workings out and why I owe what I do. They have calculated my remaining unpaid holiday incorrectly so they actually owe me money. My May pay slip has N.I deductions and something called Paye. I have never had paye tax on any of my previous payslips and had been working for ex employer full time for almost a decade.

    I understand new tax year runs from April to April and the first 8-10k you earn is tax free. Does this mean I shouldn't have been taxed as I am now unemployed havnt gone beyond the threshold? Why have I been taxed pay as you earn tax in the first place? if it is wrong is it my ex employer responsibility to sort out or mine?

    It also appears they have taxed me on my unpaid holiday and hours worked up to mid May BEFORE they added it to the payslip affectively taxing me twice?!

    Gotta speak to hr tomorrow so any help appreciated!
Page 1
    • anselld
    • By anselld 12th Jul 17, 6:35 AM
    • 5,313 Posts
    • 4,841 Thanks
    anselld
    • #2
    • 12th Jul 17, 6:35 AM
    • #2
    • 12th Jul 17, 6:35 AM
    They must assume that you will continue to work (somewhere else) for the full year even if they know you are leaving. Hence it is correct that they tax you on that basis. If you do not work for the rest of the tax year you can claim back any tax overpaid from HMRC at a later date.

    As for the detail calculations you will need to sort our with your HR, but you should not be taxed twice if that is indeed what they have done.
    • 00ec25
    • By 00ec25 12th Jul 17, 11:41 AM
    • 5,026 Posts
    • 4,373 Thanks
    00ec25
    • #3
    • 12th Jul 17, 11:41 AM
    • #3
    • 12th Jul 17, 11:41 AM
    I understand new tax year runs from April to April and the first 8-10k you earn is tax free. Does this mean I shouldn't have been taxed as I am now unemployed havnt gone beyond the threshold? Why have I been taxed pay as you earn tax in the first place? if it is wrong is it my ex employer responsibility to sort out or mine?
    Originally posted by hank_scorpio
    surely you know from the experience of your old job that tax does not suddenly kick in at the point in the year where your earnings to do cross the threshold?

    PAYE means you get 1/12th of the tax free allowance each month on a cumulative basis. You pay tax each month if your cumulative earnings to date are more than the cumulative allowance to date

    you should have been taxed under PAYE as that is the law!. It is your responsibility to claim back any tax you have overpaid as a result of stopping work part way through a year. It is not your ex employer's responsibility to re-work your tax once you have left them

    read this, paying particular attention to the inability to claim a refund if you receive the 4 benefits listed:
    https://www.gov.uk/claim-tax-refund/youve-stopped-work
    Last edited by 00ec25; 12-07-2017 at 11:43 AM.
    • hank_scorpio
    • By hank_scorpio 12th Jul 17, 2:09 PM
    • 14 Posts
    • 5 Thanks
    hank_scorpio
    • #4
    • 12th Jul 17, 2:09 PM
    • #4
    • 12th Jul 17, 2:09 PM
    Thanks for the replies.

    I guess it threw me because id just never seen PAYE on my payslip before under deductions. If that's what my tax deductions have been all along then that makes sense. I am on jsa currently looking for work so won't be able to claim for a refund yet according to that link. Hr havnt even sent me my p45 yet almost 2 months after leaving.

    Like I said, this is a mock up pay slip for May that they have created where it looks like they taxed me on holiday and salary before paye tax. Not sure why my ex employer has done that. Will speak to them.

    Final question, does the amount one earn in one month make a difference on the amount of tax deducted?

    Reason I ask is because if that is indeed is the case, hr should have paid my unpaid holiday in June. They didn't even know I left till then anyway but it appears May is the month I got my final payment & hr have used the initial overpayment of salary to then change it to unpaid holiday in their mock up payslip. If the amount of tax doesn't change then it doesn't really matter.
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