Receiving tax refunds from former employer

mountainofdebt

Not me unfortunately but Junior.

Worked full time since last September and resigned in August as he was going to Uni.

However his former employer are paying him about £130 under the heading of tax refund.

Surely this isn't right.... have told him not to spend it and to get it sorted out (aka standing on his own two feet 101) but thought I would ask on here ...just to compare what they tell him lol!

chrisbur

Sounds like his old employer has not flaged him as a leaver on the payroll program. Has he had a P45 from them yet?

Evilm

Any tax refund should come from HMRC not the employer themself (unless it is part of a normal payslip whilst still employed).

Did he get payslips from them at the time he was working for them? This sounds a bit fishy.

mountainofdebt

I don't think he's had a P45 from them (they emailed his payslips to him in the past so I'm assuming that's what they would do with the P45).

From what I can understand (I only learnt of it because he mentioned it to his dad) he had a payslip showing the refund. Always had a payslip when he was employed (always moaned about the amount of tax he was paying lol!)

As I said before, he's been told not to spend it and to get in touch with his former employer asap ........I'm not nagging him to sort it (will be much of a learning curve for me as it will be for him,lol!)

chrisbur

mountainofdebt wrote: »

I don't think he's had a P45 from them (they emailed his payslips to him in the past so I'm assuming that's what they would do with the P45).

From what I can understand (I only learnt of it because he mentioned it to his dad) he had a payslip showing the refund. Always had a payslip when he was employed (always moaned about the amount of tax he was paying lol!)

As I said before, he's been told not to spend it and to get in touch with his former employer asap ........I'm not nagging him to sort it (will be much of a learning curve for me as it will be for him,lol!)

Needs to contact employer so that they can flag him as a leaver ( may well be some holiday pay due ) and issue a P45. If he is not planning to work again before end of tax year could then use P45 with a P50 to get back any more tax refund due.

dori2o

Whats happening is that the employer is still running a payroll for him each month.

He is receiving a salary of £0. The employers payroll system looks at his total earnings from 6th April till the date the payroll is processed and works out how much tax he should have paid on those earnings at that point in the year.

He continues to accrue his tax free personal allowance each month and as he's not using any of it currently, the employers payroll system realises he has paid too much tax at that point in the year and efunds whatever he has overpaid at that point back to him.

As has been said he can easily rectify this by contacting the employer and asking for a P45.

The P45 will detail his total earnings from 6th April til now, and how much tax he has paid to this point in the year.

If he is looking to start work in the next 4 weeks (possibly a job over Christmas?) then keep hold of the P45 and hand it to the new employer.

If he doesn't expect to work again before 5th April 2013, download a P50 from the HMRC website and claim a refund of whatever tax is now due from HMRC.

As long as he has not had any further employment since leaving his last job until now, he will be fine to spend the refunds he has been receiving.

mountainofdebt

chrisbur wrote: »

If he is not planning to work again before end of tax year could then use P45 with a P50 to get back any more tax refund due.

haha he might have planned not to work but this might have just changed his mind (wondered how he was coping so well financially!)

I'm hoping (but not telling him...all part of the great plan) that it will all balance out but he does have the ability to repay it if needs be.

Oh the lessons of life are being learnt!