Overpaid by previous employer

first78

I finished working for my local authority at the end of March, due to their incompetence they paid me a full months wages at the end of April (when I called payroll to inform them they weren't even aware I'd left!). I was advised that they would send my P45 and a letter detailing how to repay the money...3 weeks later I'm still waiting for a letter and am wondering whether to spend the money and just pay it back in instalments when they get round to contacting me. Is there anything wrong with doing this?

reallyconfusednow

Lets be honest, if you've genuinely attempted to obtain details to repay the money, and 3 weeks has elapsed since that time with repeated follow up attempts to again, obtain the necessary details to repay the funds, then you.....

... still can't, or shouldn't, spend the money. Unfortunately, mistake or not, if it wasn't rightfully owed to you then you aren't legally entitled to it. Whether you choose to take note of that is a personal decision, you're not going to get into trouble for spending the money, or its very unlikely, at the end of the day they made the mistake and you're not refusing to repay, the only thing to remember is that you will have to repay it, so treat it like an interest free loan and be ready for them coming back and asking for it immediately at any moment.

Me personally, i'd stick it to one side and forget about and keep chasing them. Should you spend (or have already spent it) whilst it's their mistake, it simply puts you at a defecit going forward.

I'm sure when funds are paid to you that you're not owed and you spend them it's still seen as "theft".

first78

I have moved it from my current account to my savings account as I was assuming I'd be contacted within a week or two with details of how to repay the money. I've notified them of their mistake and don't see that I should have to chase them to pay the money back.

reallyconfusednow

I agree entirely, i've been in the same position myself where i was paid twice in one month, the only thing to consider is that their mistake or not, having to chase or not, when it comes to the crunch you will legally owe the money and have never been entitled to it, so obviously the onus is then on you to claw your way out of it either from a legal perspective or a financial perspective, or both.

DCFC79

I wouldnt spend it, I believe they have 6 years to ask for it back.

anamenottaken

Did you write to them or just phone the payroll people?

Write, obviously keep a copy of your letter, and get proof of posting (free, over the counter at a post office).

They need to sort it out properly as they will have reported the payment to HMRC and your account will be showing the NI and tax deducted. It isn't as straight forward as your simply sending them the money you have received - that way you would be out of pocket, having had your tax free allowance reduced but no money in your pocket in relation to it.

TELLIT01

first78 wrote: »

I have moved it from my current account to my savings account as I was assuming I'd be contacted within a week or two with details of how to repay the money. I've notified them of their mistake and don't see that I should have to chase them to pay the money back.

I agree that you shouldn't have to chase them to pay the money back if you have already informed them of the error. That does not mean you are free to spend it, particularly as you have already realised it is not your money.
Leave it in the savings account until they contact you.

first78

anamenottaken wrote: »

Did you write to them or just phone the payroll people?

Write, obviously keep a copy of your letter, and get proof of posting (free, over the counter at a post office).

They need to sort it out properly as they will have reported the payment to HMRC and your account will be showing the NI and tax deducted. It isn't as straight forward as your simply sending them the money you have received - that way you would be out of pocket, having had your tax free allowance reduced but no money in your pocket in relation to it.

I just just the payroll dept. I hadn't thought about the tax and NI I'd paid...just glad I've left working for such a useless organisation!

TBagpuss

DCFC79 is correct, they have up to 6 years to ask for it back, so don't spend it.

Do write to them, setting out the amount overpaid, reminding them that you have already notified them and that you are still waiting for your P45 and the details of repayment, and asking for details to repay it and confirmation that they will ensure that they correct the records with HMRC so you are not taxed incorrectly. Keep a copy of the letter and proof of postage.

If you wanted to, you could include in the letter a line to the effect that if you don't hear from them within (say) 28 days you will regard the matter as closed and will assume that they have determined that the amounts paid to you were correct and that no refund is required. I doubt that would stand up in law if they tried to claw it back later, but it may well give them the incentive to respond.

jobbingmusician

But why do you want them to respond?

If you are NOT planning to move house, I would simply keep quiet. They have overpaid, and you have notified them of this fact. The ball is now in their court. However, there is a risk if you are likely to be difficult to get hold of. If you moved within the next 6 years and they tried to contact you, there is a risk of getting a CCJ or similar without your knowledge.

first78

jobbingmusician wrote: »

But why do you want them to respond?

If you are NOT planning to move house, I would simply keep quiet. They have overpaid, and you have notified them of this fact. The ball is now in their court. However, there is a risk if you are likely to be difficult to get hold of. If you moved within the next 6 years and they tried to contact you, there is a risk of getting a CCJ or similar without your knowledge.

I am planning to move in 2-3 years...I feel like I have notified them, if I hadn't God only knows how long they may have continued to pay me for! I don't feel at all inclined to keep chasing them to try and give the money back, I've made them aware of their mistake and the way I see it is the ball is now in their court.