Holiday pay

Aitky75

Hi am new to this so bear with me please 👍, I have 7 days holiday that have been given to me by my work, I got my holiday pay today along with my wages from last week, I usually pay £20 tax and £20 national insurance but today I have been taxed £197, my employer has paid my holiday pay as hours, so it looks like I worked 96hours last week and now I've been hammered by tax, is he allowed to do this or should it have been stated it was holiday pay? Thanks for reading

Savvy_Sue

it would make no difference whatsoever how it was described: you were paid a higher amount than usual, and HMRC assume that you'll earn that much for the remainder of the year. Since you won't, next time you're paid you'll probably get a tax refund.

Aitky75

Thanks for the reply savvy_sue. My work doesn't pay to the hmrc every week, they take tax from our wages and post the taxman yearly. Again thanks for the help

Savvy_Sue

Aitky75 wrote: »

Thanks for the reply savvy_sue. My work doesn't pay to the hmrc every week, they take tax from our wages and post the taxman yearly. Again thanks for the help

they may not be paying HMRC every week, but it's very unusual only to pay annually - when I was running a very small payroll we paid quarterly.

Also, there's this thing called Real Time Information - RTI for short. My understanding of that is that every time you are paid, your employer must report to HMRC what's been paid, and what is owed to HMRC.

So what I said stands: next time you are paid, I'd expect you to get a tax refund.

caronc

The quick answer is yes it's correct, however you may find, depending on you tax code, that you get the tax element refunded next month (failing that directly by HMRC following the end of the current tax year). The £20 National Insurance has been correctly deducted as far as I can see but you wont get that back.

Aitky75

Thanks guys �� hope you both have a nice Christmas

getmore4less

Why was the holiday pay not paid in the week you took the holiday?

Aitky75

This is my Christmas holiday pay

getmore4less

That should be paid using 2 weeks tax/NI limits if it is pay for a next week.