Repaying Enhanced Maternity Pay Query

Dave_6

Hi All,

Need some guidance on this and on who’s responsibility it should be to discuss with HMRC.

Wasn’t sure whether to post this in the Employment forum, Cutting tax or Basic rights at work.

My partner went on Maternity leave in August 2014 and was given the choice of taking enhanced maternity pay, she decided that she would take it.

Towards the end of maternity leave she requested part time hours but had her request and subsequent appeal both refused.
She handed her notice in and left the company in May 2015.

As she didn’t go back to work at that company for 12 months following the end of the maternity leave she was required to repay the enhanced maternity pay.


However the company requested that she repaid the full value of enhanced maternity leave including tax and NI deductions.

They stated “as you resigned in the new financial year, we are not able to make adjustments for your tax and NI for the 2014/2015 tax year. You will need to speak directly with HMRC to recover any payments of tax and NI that were deducted for the enhanced maternity pay”


She’s been repaying this in 3 installments and has 1 installment to go,she has rang HMRC and after being on hold for 40 minutes HMRC advised that this was unheard of and advised her to speak to her previous company.


If she repays the company directly as she has been, HMRC will never see sight of those payments and will never be able to grant her a tax rebate, they said that she paid the correct amount of tax before any repayments were made.



In figures,

Tax year 2014-2015 she earnt 20k and paid £1994 in tax and £1445 in National Insurance which HMRC have confirmed was correct. Total deductions of £3439.00

That’s with her tax code 962L and 2% pension contribution.

In 2015 she earnt £700 before leaving, she didn’t pay any tax on the £700, I presume as it was statutory maternity pay by then.


She is having to pay back £3700.00 in total which would mean her actual earnings in the 2014-2015 tax year weren’t 20k, but infact £16,300.00


If she uses the MSE tax calculator and inputs her earnings as £16,300.00 for tax year 2014/2015 the tax and national insurance contributions should have been £1269 and £1001.


This would mean that she’s overpaid tax and NI by £1169
moneysavingexpert.com/tax-calculator/


So, 3 questions –
Am I calculating this in the right manner?
Is it her responsibility to try and resolve this with HMRC?
Should she pay that final installment or wait for a response from her previous company?


She’s at the stage now where she’s writing to her company with the information above and that HMRC advised that they hadn’t heard of an instancewhere a company requested someone to repay them a value which included tax and NI deductions

Dave_6

Well we've written to them with 2 likely scenarios -

Issue a payslip with a negative figure of £3,700.00 and submit that toHMRC, this will then update the 2014/2015 tax year earnings to balance theprevious years figures.

Alternatively issuea payslip with a negative gross figure of £3,700.00 and the net amount wouldthen be the correct amount she should have repaid. That payslip is then to besubmitted to HMRC so that year to date figures balance up correctly.

Either way she's unable to notify HMRC of the change to earnings herself and how her previous company have worked values out.

Will await a reply.