Redundancy Overpayment....What to do...

RJB0964

Hi there - I was made redundant at the beginning of Jul but fortunately qualified for a redundancy payment. This was paid within a few days of leaving work but the company forgot to deduct any tax or NI and have only just informed me of this error. What are my rights here? Am I liable to pay the tax / NI back (just over £1400 in total)? Can I pay the amount owed back over a number of months - I still haven't got a job and the money would help until I get one. Any advice gratefully received - thanks

elsien

It was only 3 weeks ago so you can't have spent it. Just pay it back.

It's not reasonable to expect the company to subsidise you till you get a job by agreeing a repayment plan when the money's sat in your bank account.

nicechap

I was under the impression redundancy payments (up to £30k) was paid tax free, as opposed to notice pay.

Speak to your union.

Jazee

nicechap wrote: »

I was under the impression redundancy payments (up to £30k) was paid tax free, as opposed to notice pay.

Speak to your union.

This is correct. So unless they forgot to tax any amount over that, you shouldn't owe anything.

sangie595

Even if this is not arising from the redundancy payment (which would be tax free up to £30k) but something else, £1,400 tax and NI is an enormous amount to owe. On what basis did they say you owe this?

getmore4less

Tax and NI suggests pay as any excess redundancy is just tax.

£1,400 could easy be Tax and NI on a month PILON + accrued unused holidays for someone earning as little as £40k.

badmemory

I would ask that they give you a document stating how much tax & NI should have been deducted & what from as proof that they intend paying this amount over to HMRC. If they don't then you will have the same bill from HMRC at the end of the year & good luck with that one! Check when you get it that you have had July's personal allowance once and only once.



I hope you get a job very soon & that it is an employer more competent than this one.

sangie595

getmore4less wrote: »

Tax and NI suggests pay as any excess redundancy is just tax.

£1,400 could easy be Tax and NI on a month PILON + accrued unused holidays for someone earning as little as £40k.

Yes it certainly could. But since £40k isn't a "little" for the majority of the population, it's worth asking the question! The vast majority of working people don't earn as much as £40k a month.

pelirocco

RJB0964 wrote: »

Hi there - I was made redundant at the beginning of Jul but fortunately qualified for a redundancy payment. This was paid within a few days of leaving work but the company forgot to deduct any tax or NI and have only just informed me of this error. What are my rights here? Am I liable to pay the tax / NI back (just over £1400 in total)? Can I pay the amount owed back over a number of months - I still haven't got a job and the money would help until I get one. Any advice gratefully received - thanks

Didn't they inform you ,and the end of your consultation period ,how much redundancy payment you would be receiving ? This was something we were advised to do , when making redundancies