Paying back Voluntary Redundancy to return to work

smileybird

I took voluntary redundancy in Aug 2009. The amount received was over £30K so there was a payment to be paid to the taxman!

There has been talk that I could return to my old company as long as I re-paid them the VR payment over a set term. They will be taking the VR repayment off my net pay and they want the full amount of VR paid back.

My question is whether I can claim back from HMRC, the tax that I had paid on the original VR payment?

Thanks for any help!

zzzLazyDaisy

If the payment was made in August 2009, then it is not repayable.

If you go back to work for the company it will be on an entirely new employment contract. There is no basis whatsoever for the company to ask for repayment of any of the previous redundancy payment.

I am not a tax expert so I cannot answer your question - but I doubt that the taxman will agree to refund tax that you have legitimately paid in a previous tax year, on the basis that you have now voluntarily agreed to make a payment to your employer that it has no legal right to receive from you.

If you are determined to agree to this, perhaps the best way is just to agree to a reduced salary for a given period of time. That way you won't be taxed on that element. But in my view this request for repayment by your employer is unacceptable.

ALIBOBSY

Usually VR agrements will have a clause that if you return to the company (for public sector it covers all government jobs) within a certain period you agree to repay the money. However the only ones I have heard of usually only say 6 months as a max. I would check the terms of your original agreement. Think they may be trying it on.

It would have to be a massive wage surely to make that worth your while.

I would double check the tax thing with HMRC, I had an overpayment of salary a few years ago and go the tax back. The situation is not disimular in that your are taxed on a payment and then it is recovered by your employer?

ali x

Peelerfart

Could you consider going back as freelance/contractor ?
Would that be acceptable to them ?

silvercar

Your salary would have to be very decent to be considering paying the VR back. As over a month has passed you would not have any continuety of service. This means that should they take you back and then make you redundant again, your payment would be based on the length of service since now.

If it was a different company, it would be like paying over £30k to be allowed to work for them.

Unless they were intending to pay you full pay for the whole time you had been out of work, I think they have an absolute cheek to even ask you.

If they are unhappy with you receiving redundancy and returning to work, they should offer you a new contract with a salary that they see fit bearing this in mind.

I certainly wouldn't be paying any company to work for them.

MikeyBhoy

I read a thread on here where the lady had gone back to work for the company and repaid the VR she received. They then got rid of her after a few months and didn't have to pay her anything. I think the sums involved in that case were significantly less than you have received so tread carefully.

In the public sector where I worked, there was a requirement to pay back a % of redundancy payments if you rejoined. If you were reemployed within, say, a week you repaid just about all of it. If reemployed after around 6 months you paid back less than half, so there was a tapering effect. After a year away, as in your case, nothing would require paying back.