repayment of salary advance

tayloral

hi.
i have a tax question. i'm hoping to find out if i can claim back the tax on money i've repaid to my previous employer.

basically:
they paid me a lump sump net of tax, repayable in full (the gross amount) if i resigned within a certain period.
i did then resign, and they are taking the repayment from my salary during my notice period. by the end of my notice period i will of repaid the entire gross amount.
fair enough, that it was an offer they made me when i hadn't decided to resign(it wasn't the money which was keeping me).

however given that i'm repaying the gross amount will this count against my tax bill for the year. my latest pay slip has has the total amount paid to me on it.
i suspect paid for advise might be needed here, but if its a complete non starter i'd rather know first.

thanks in advance

Debt_Free_Chick

You should be in the same position, net, overall. It should be no different to you being employed for an extra month, or whatever period equals the gross advance paid to you.

tayloral

except that the taxable gross on my payslip is increasing and shows no reduction for the repayments.
so i'm a little concerned that the final taxable gross and tax paid amounts will include the advance, so the tax will look correct as the repayments are from the net amount.

Debt_Free_Chick

If tax & NI was paid on the advance, then the reduction should a net amount, deducted from net pay.

Did you get a payslip or document for the advance that showed the tax paid?

What about "tax to date" on your payslips - does that include tax paid on the advance? You may need to go back to the payslip issued before the advance and the one issued after it. Compare the tax paid to date amounts to see what's included.

tayloral

hi.
yes, tax and NI was paid on the advance, i recieved it detailed on the payslip for that month. the advance was just added onto that months pay.

tax to date does include the tax paid on the advance.

so. if it was say £100 before tax, i received £60 (40% forgetting NI in my crude calculation). but the repayment to the company is for the full £100. so they are now taking £33.33 from each of my final 3 pay cheques after tax has already been deducted.

Debt_Free_Chick

If they're taking £33.33 from your gross pay, that would be right - and it would make the tax right, too.

chrisbur

tayloral wrote: »

hi.
yes, tax and NI was paid on the advance, i recieved it detailed on the payslip for that month. the advance was just added onto that months pay.

tax to date does include the tax paid on the advance.

so. if it was say £100 before tax, i received £60 (40% forgetting NI in my crude calculation). but the repayment to the company is for the full £100. so they are now taking £33.33 from each of my final 3 pay cheques after tax has already been deducted.

As the advance was added to your gross pay then it should be taken back from your gross pay not your net pay. To check if it has been deducted from gross take your gross to date from your last but one payslip and deduct it from your gross to date on your last payslip. If the difference is your months wage then the deduction has been from your net pay but if the difference is your months pay less what you are paying back that month it has been taken from your gross pay.

tayloral

hi.
thanks for the help on this.
checked all the payslips and they are definately deducting the repayments of the _gross_ amount from my _net_ pay. which effectively means they tax is being paid a second time.
so they advanced 100. i got 60. i'm repaying 100. but as its out of post tax income its costing me £166 to repay the 100. and the gross amounts paid is going up accordingly.

as this is allready done the only way to get it sorted out is going to be to try and convince the taxman that this money was repaid to the firm. so i didn't see it as income, so i've overpaid. could be tricky...

Debt_Free_Chick

Why don't you speak to your payroll department about it?

chrisbur

Debt_Free_Chick wrote: »

Why don't you speak to your payroll department about it?

I agree, all that is needed is for your payroll dept to add what they have taken to your net pay and then deduct correctly from your gross pay.