Employer asking Money back as "Overpayment"

macgyver

Hi there,

I dont know whether it is the right place to post or not.Moderators, Kindly move if need be.

My wife works for NHS and she recently moved to Part Time from Full-Time in the same Job in March. This meant that she moved from a higher tax bracket to Lower tax bracket.

Now the Pay-roll are saying that they accidently overpaid her by mistake on the Full-Time rate instead of Part-Time in March.
But the money they are asking back is much more than they have actually paid.
On speaking to them, they say that they are asking for the gross money which they have overpaid and the tax will adjusted later.
On the overpayment she has been made, the tax has already been cut at source at a Higher rate.

So what are the rights of my wife regarding this?
Should she be seeking legal advice?
Thanks

milkydrink

Her tax rate does not change from lower to higher on the job hours changing.

You pay tax on what you earn regardless of how many hours you worked.

They will take it back gross, her tax liability will only be on what she has actually earnt.

Don't worry it will work out fine. It's just a bit fiddly to understand. But she will show as earning a lot less in the month they reclaim it & probably not pay any/much tax at all. That will cover the extra she paid when she was overpaid.:D

macgyver

Thanks.
Yes, indeed her salary as decreased as her hours of working have decreased. So now her annual gross salary falls in theLow Tax bracket.

But the overpaymnt is much more than her present one months salary.

milkydrink

She won't pay any extra tax as tax is a rolling sort of charge (cumulative).
But however she could end up a bit short of ready cash if they take it all in one month.
Can she not make an agreement to pay them back over the X months that they overpaid her by?

Say it was three months & she owes £900, can she ask to pay back £300 a month for three months.

Savvy_Sue

She could ask her local tax office to explain how the employer SHOULD do this, they may even check over the calculations, I have always found them really helpful.

cash99

macgyver wrote: »

Hi there,
Now the Pay-roll are saying that they accidently overpaid her by mistake on the Full-Time rate instead of Part-Time in March.
Thanks

If the gross amount is repaid you may well not get all the tax back as we are now in a new tax year, particularly if your wife was taxed at the higher rate in March and will be taxed at basic rate now.

milkydrink

cash99 wrote: »

If the gross amount is repaid you may well not get all the tax back as we are now in a new tax year, particularly if your wife was taxed at the higher rate in March and will be taxed at basic rate now.

Oh yes, we are on just into the new tax year.

Right suituation is she has been overpaid, so shes paid tax on money she hasn't earnt.
So now this year, shes earning less so paying less.

Can we have figures & her tax code please?

She will need to chat to payroll about it, to get it sorted properly.

mountainofdebt

but NI and any payments to the student loan people (if applicable).

tigtag02

Surely it would br easier for the payroll dept to recliam the overpayment as a net figure. Especially as its a new tax year.

I am also confused as to how the overpayment is more that her payment when in theory it should only be the difference between the hours!!

I second the request for figures and tax codes please OP