Ex employer overpaid me, now they want the GROSS amount returned...?

jonesas

After leaving my last employer in the first week of August I expected to get paid for the few days into the new month that I worked but was actually overpaid a whole month's salary come September. I didn't yet have my P45 so assumed they hadn't taken me off payroll and I called and left a message stating this.


About a week later I get two letters, one saying my P45 is coming soon with no other explanation and the second being a threatening "we want our money back" letter. The figure I was transferred was £1,126.60 but the amount they were asking for was closer to £1500.


When I called the payroll service I was told someone would be in touch and soon after I received a rather abrupt email stating that I was to pay back the GROSS figure and reclaim the tax from either my future employer or the tax office directly. They said that I should have been paid £185.something so they have deducted this but the rest I am obligated to pay and they blamed this on my being on a 'non-cumulative' tax code, they then followed with threats of court.


I called HMRC to ask how I would go about reclaiming and they told me matter of fact that the employer should reclaim the tax themselves and they have a specific procedure to do so. I emailed my employer back advising of this and was told to get HMRC to give me a cumulative tax code by the end of the next day.


So AGAIN I called HMRC to be told that they don't know what they are talking about, they don't need a cumulative tax code to reclaim their incorrectly paid tax and that they sound as though they are trying to get out of doing the work. I emailed back again advising of this and they are now simply threatening to take me to court.


I don't really think it's fair, I ended my employment in the correct way, I even worked an extra week's notice despite it being the job from HELL. Why am I paying for their mistake? Having to waste my time and pay back money I wasn't even given in the first place? I have openly stated I am happy to pay back what I was incorrectly debited.


Where do I stand?

Comms69

jonesas wrote: »

After leaving my last employer in the first week of August I expected to get paid for the few days into the new month that I worked but was actually overpaid a whole month's salary come September. I didn't yet have my P45 so assumed they hadn't taken me off payroll and I called and left a message stating this.


About a week later I get two letters, one saying my P45 is coming soon with no other explanation and the second being a threatening "we want our money back" letter. The figure I was transferred was £1,126.60 but the amount they were asking for was closer to £1500.


When I called the payroll service I was told someone would be in touch and soon after I received a rather abrupt email stating that I was to pay back the GROSS figure and reclaim the tax from either my future employer or the tax office directly. They said that I should have been paid £185.something so they have deducted this but the rest I am obligated to pay and they blamed this on my being on a 'non-cumulative' tax code, they then followed with threats of court.


I called HMRC to ask how I would go about reclaiming and they told me matter of fact that the employer should reclaim the tax themselves and they have a specific procedure to do so. I emailed my employer back advising of this and was told to get HMRC to give me a cumulative tax code by the end of the next day.


So AGAIN I called HMRC to be told that they don't know what they are talking about, they don't need a cumulative tax code to reclaim their incorrectly paid tax and that they sound as though they are trying to get out of doing the work. I emailed back again advising of this and they are now simply threatening to take me to court.


I don't really think it's fair, I ended my employment in the correct way, I even worked an extra week's notice despite it being the job from HELL. Why am I paying for their mistake? Having to waste my time and pay back money I wasn't even given in the first place? I have openly stated I am happy to pay back what I was incorrectly debited.


Where do I stand?

So pay it back! How do you think a court will look at it if you've acted reasonably?

brewthebear

Just pay back what was you received as overpaid after tax, let them deal with it.Their problem.

sangie595

I agree. Pay back the overpayment but not the tax, and leave them to take you to court over that amount. I very much doubt they will, because toy have a defence for the tax part, and they know that. If you pay nothing back you have given them incentive to carry out their threat.

agrinnall

I would ask for this to be moved to the Cutting Tax board, because there is something at the back of my mind that says paying back the gross amount is the correct thing to do. I wouldn't rely fully on what a HMRC customer service person has told you.

TrickyDicky101

I wouldn't pay more than the net amount back - if nothing else, you will have also suffered additional NICs which you won't be able to reclaim via other means.

WibblyGirly

jonesas wrote: »

The figure I was transferred was £1,126.60 but the amount they were asking for was closer to £1500.

Am I the only only one who reads this as the OP has already paid back the Net amount and it is the tax amount that is in dispute??

OP, I'd let them take you to court. They should claim the tax back from the HMRC. I would refuse to be out of pocket for their mistake.

jonesas

WibblyGirly wrote: »

Am I the only only one who reads this as the OP has already paid back the Net amount and it is the tax amount that is in dispute??

OP, I'd let them take you to court. They should claim the tax back from the HMRC. I would refuse to be out of pocket for their mistake.

It is indeed the tax amount that I am disputing but, as it stands, I have not sent any money back. I was the one to contact them advising of the error and I have all intention of paying it back once I have an appropriate figure, which I have told them. I even offered to transfer half of what they asked me to pay, until the balance is corrected, as a gesture of good will and they more or less said all or nothing.


Part of what was transferred to me is actually owed to me but they have again given me the GROSS amount for this. That figure needs to be taxed as a standalone figure. The full GROSS amount paid to me would have been taxed as a whole so simply subtracting the 185something and returning the rest wouldn't be accurate. I want them to provide me with how much I SHOULD HAVE received AFTER tax and the remainder I will transfer back to them. If it was simply a matter of it all being sent in error I would just transfer it back and let them deal with the rest.


I have spoken to HMRC, ACAS and the CAB who have all told me either it's their responsibility to sort out or just that it's up to us to agree repayment as I am no longer an employee and they can do whatever they want/ask for whatever they want. I have mixed advice and basically I just don't want the agro of court when I haven't done anything wrong!!!


I can try to figure out myself all the taxes and stuff to repay and ignore them but I am god AWFUL with numbers (and none of this is my bloody fault, as a payroll service they are fully qualified to deal with this AND they get bloody paid to do it!!!!!) and was hoping someone might have experienced something similar and be in the know on where I legally stand!

agrinnall

As I've already said, if you want the best responses on tax then you need to post on the correct board. I haven't yet seen a response from any of the people that I would regard as having the greatest level of expertise, because they post mainly on the Cutting Tax board.

burnoutbabe

We had this at work. What we did was contact the employee, agree there was an overpayment of gross amount x, and that we would redo the final payroll, re-issue the P45 and then they repay the net amount. We then reclaim the tax and NI along with our next payrun.



(i assume its harder if a different tax year but simple enough in the tax year)

jobbingmusician

I'd endorse the advice already given to just repay the net amount you were paid, and send a letter stating that the advice you have been given it that is their responsibility to sort out the overpaid tax and NI. No maths required, just send them whatever you received!

Oh, actually, I see that this will leave THEM owing YOU for a few days' pay in September. Hmmm. Assuming there's no holiday involved (you did get payment for any untaken holiday accrued, didn't you?) you could just send them x% of the payment they made you, where x = [30 - date you left] divided by 30

(The maths behind this, giving an example. If you left on the 7th, they should pay you for 1-7 September. They have paid you for 1-30 September. They therefore owed you 7/30 of September's pay, and thus you owe them 23/30 of the payment they made you.)