Paid someone elses bonus .. now paying the price !

NapoleonBlownApart

I'm not sure if this is the correct part of the forum but it appeared the best suited.

When I received my payslip (I work for a well known large supermarket chain) in november LAST year I was astonished to discover I had received a bonus of almost £6500! Lovely you might think, BUT this wasn't intended for me, it was someone ELSES bonus wrongly paid to me! I don't receive any sort of bonus.

As this bonus was paid with my normal monthly salary I paid tax, NI and pension on the total amount. The tax was over £1500 when my usual tax deduction is about £250!!! The NI was three times the usual amount too.

Being an honest person I imediately informed the company and they were as surprised as I was but had no idea what to do. I have an off-set mortgage to I moved the remaing £5000 into a savings pot so I wouldn't accidently spend it, while they tried to work something out.

The end of the financial year came and I duely received my P60 that shows I was paid over £6500 more than I should have, and of course the tax deduction that goes with it.

In APRIL this year (yes APRIL) the company finally decided to take some action and in Aprils pay deducted £250 from my pay before tax, NI and other deductions.

They have now taken £1000 EVERY month for the next six months, in each case before tax, NI, pension and other deductions, basically reducing my wage by £1000 every month.

This was fine for the first five months as on each pay day I off set their deduction by moving £1000 of the 'bonus' from the savings pot into my current account.

However last payday they took the last £1000, the sixth such deduction leaving my with practically nothing, infact if I hadn't worked a bank holiday and a couple of sundays for which I get paid a bit more I would have been paid in the negative!!!!

Now I understand that I was overpaid alomst £6500 and they have retrieved £6250 but as already stated I paid tax, NI and pension on the original bonus amount so I don'tthink they should have taken so much back.


I've spoken to various people in the pay office whos reply is they are correct. I'm sure they are not. In reality my P60 from last year shows I paid tax on £6500 I never had!

I don't mind paying back the £5000 I had stored for them, but as far as I can work out the company should get the other £1000 back from the Tax man (no chance there I hear you cry!!), the extra £200 I paid in NI from the NI people and the extra pension I paid from our own pension department.

I hope you people in the know can make sense out of what I've written above as its really doing my head in.

None of this is my fault but I feel I'm paying a very heavy financial price for someone elses mistake and my own for being honest!!!

You thoughts would be appreciated.

themull1

Should you not be contacting the tax office to get the tax refunded? or getting your company to explain to the tax office what has happened? why did you not just give the company it back all at once, you didn't have to accept the 1000 pounds a month thing.

NapoleonBlownApart

Hi,

The company had no idea how to take the money back, they said to leave it to them to sort but the months just ticked by until april this year. I'm sure that was part of their cunning plan.

I offered to write them a cheque but they said no, and to wait.

I have contacted my tax office and they said its nothing to do with them and to contact my pay office ... :mad:

withabix

As it was taken off you before tax, you have effectively been credited the tax back by default. It may not seem like it, but you have.

As personal allowances for this tax year are the same as last year and you won't have been in a different tax band, there is nothing to claim.

You say you put the overpaid bonus in a savings account, so you have still got the money. If you take out approx £750 per month from your savings account and 'pay' it to yourself, you are no worse off.

Similarly, the NI corrects itself and so do your pension contributions.


I can hear you saying 'that's boll*cks', but sit and think about it for a while and you will realise that I am right.

slummymummyof3

Surely the op willl have had 25% deduction of the original amount of £6500 in tax and NI contributions? She would have paid more than £250 in tax and NI contributions on this amount - so therefore would be worse off than the company have allowed for when they have deducted £6250 from her earnings? Unless the deductions of £1000 per month have been made before tax and NI have been applied???

withabix

The OP would only be worse of IF the money was taken back in full AFTER tax and NI.

Because it has been taken off BEFORE tax and NI, the OP is put back into the same position as they would have been if they had never been paid the bonus in the first place.

The OP has the money in a savings account, so just needs to pay themselves approx 1/6 of the savings account each month.

The £5000 that the OP has in their savings account is AFTER TAX AND NI and is therefore the same as the £6500 that the employer is taking back BEFORE TAX AND NI.

Chinkle

OP although you paid more tax and NI last year, you are paying less this year, because your gross pay has been reduced by the company in order to reclaim the wrongly paid bonus.

In fact you should consider yourself lucky that you have had the money sat in your account for so long reducing your mortgage interest payments and that the company didn't ask for it back lump sum.

Mikeyorks

NapoleonBlownApart wrote: »

This was fine for the first five months as on each pay day I off set their deduction by moving £1000 of the 'bonus' from the savings pot into my current account.

That's the root of your problem.

As you weren't paying tax / NI on the 'reclaimed' £1000 ........... then the correct figure to move would have been around £700. If you look back at your net income for those 5 months last year (adjust for any pay increase in the interim) ....... and compare with the net income + £1k this year - I think you will find you were close to better off by around £300 each month!

withabix

Mikeyorks wrote: »

That's the root of your problem.

As you weren't paying tax / NI on the 'reclaimed' £1000 ........... then the correct figure to move would have been around £700. If you look back at your net income for those 5 months last year (adjust for any pay increase in the interim) ....... and compare with the net income + £1k this year - I think you will find you were close to better off by around £300 each month!

Missed that bit - he overpaid himself! :rotfl:

NapoleonBlownApart

After weeks of haggling I was repaid £1664 last week. :j

Thats Christmas sorted :beer: