Overpayment - gross v net confusion (Tax and NI issues) - what are my rights?

supersezzie

Hi everyone,

I've been told recently that I've been overpaid by work. I know I have to pay it back but the way it is being handled is appalling, and I wondered if anyone can advise on these issues:

1. They have quoted me the gross overpayment figure. This is scary! I have asked about 6 times now for the actual net figure that I owe. I have also phoned an advice line who told me an empployer has 4 yrs to reclaim overpaid tax and even longer for NI. I have told them this, and said consequently, I'd like to know exactly what I owe them so I can strike a deal. Am I losing my mind, or is it utterly ludicrous that they are asking for money back, giving me deadlines and bullying, before they have even quoted the actual figure that I need to pay back?

2. I have been given a deadline to respond, despite repeatedly going back to them asking for the net overpayment figure. Surely if I wanted to repay in a lump sum, it would be the net figure, not the gross amount, as about 20% of that I have never received since it went straight to the taxman.

3. They want me to repay from my gross salary. This means 1: I have no idea what I'm dealing with - they want me to strike a deal which makes it all clear and easy for them but have not told me in advance how this will affect me financially. 2: if it comes from my gross salary, is this effectively lowering my income/salary? As in, could it have implications if I need to apply for credit in the future?

4. Do I have the choice to repay the payment not from my gross salary, but as a deduction from my net pay?

5. Can anyone clarify if it is their responsibility to reclaim the overpaid tax and mine to just repay the net figure?

Sorry, I think that's the same question worded 5 different ways! Any advice would be much appreciated on my rights and what to do next.

Thanks!

redcard

Example, you get paid 40 hours at £7.00 per hour.
Your gross wage is £280.00.
One week they pay you 48 hours in error. You have been overpaid 8 @ £7.00.
So the next week, to correct this, they pay you 32 hours @ £7.00.

It really is that simple.

Bullying? Are you serious? If you're gay you could maybe accuse them of a hate crime!

supersezzie

But what if I want to repay a lump sum and have it all over and done with? OR if I choose to leave the employer before they can reclaim it from my wages so I need to make a lump sum payment? Either of these is much more likely than me staying with them long enough to reclaim it through salary. Surely it is my right to know what the net amount is and therefore exactly what I owe before I agree a repayment plan. They seem to be clear in the implications for them, but not for me!

I probably shouldn't have mentioned the bullying on here, this is a drop in a very bad ocean of difficulties that I won't go in to!!

Southend1

They wouldn't necessarily know the net amount, particularly if you are repaying over a number of years. This is because tax, NI rates etc can change and the employer has no control over this.

mountainofdebt

OP...what gross figure are we talking about and over what period of time gave you been overpaid?

AP007

All over payments start as a gross figure so the company should give you details of the payments were the GROSS entered was incorrect.

The adjustments would be made at GROSS

ohreally

Their payroll will have records indicating how much the differential is. Have them provide this to you in a clear and understandable format before you agree to anything.

Additionally are there pension contributions to take account of?

Don't permit them to fob you off as they must have this information to establish if an overpayment situation actually exists or are they plucking gross figures out of the air in the hope you will agree an easy resolution?

They must have the information - share it.

shezza2

Southend1 wrote: »

They wouldn't necessarily know the net amount, particularly if you are repaying over a number of years. This is because tax, NI rates etc can change and the employer has no control over this.

So the OP is supposed to know this right?

It really pees me off when I constanly read about people being overpaid by companies and of course under taxed by the Inland Revenue and then having to pay it all back. The ordinary working man will not stand a chance untill these incompetent morons that introduce the wrong rates of pay and wrong tax codes are made to pay the loss's themselves, and then sacked.

Kayalana99

Now I might be wrong but it makes sense to me.

Companys pays £2000

Taxed £500 Total recieved = £1500

Reaises overpayment of £1000, asks for £1000 back but has overpaid £250 tax.

Person pays £1000 to employer...then seeks the £250 refund from the tax man.

(I know these figures aren't right to the 20% tax etc but this is how I see it so the gross figure should be correct then they need to inform tax people the pay was wrong to get a refund?)

comeandgo

If the gross payment is repaid from his wages then it could lead to a tax repayment via employer if enough tax paid that tax year, so therefore it is in best interest to get it sorted out while at work, even if it means no pay for a month or two - you mentioned a lump sum? You could live on that when you have no wages. Your company paid you out gross so will take it back gross - any tax arrangements are between you and HMRC.

AP007

Kayalana99 wrote: »

Now I might be wrong but it makes sense to me.

Companys pays £2000

Taxed £500 Total recieved = £1500

Reaises overpayment of £1000, asks for £1000 back but has overpaid £250 tax.

Person pays £1000 to employer...then seeks the £250 refund from the tax man.

(I know these figures aren't right to the 20% tax etc but this is how I see it so the gross figure should be correct then they need to inform tax people the pay was wrong to get a refund?)

All overpayments taken back will generate a - figure for the person to pay back and the - entry also for the tax and NI hence on their return at the end of the year this refund is reflected.

You do not get the refund from the tax man