Tax refund????

fancyabrew

I took voluntary redundancy back in June, my last day of service was 30th June. When I got my final month salary including the redundancy payment I noticed I’ve paid about double the tax I was expecting, so I’m trying to get this paid back before the end of the tax year, and I’m not getting very far with HRMC!
I worked for 3 month of the current tax year, April, May and June and earned about £12k my redundancy was £69k so less £30k that’s £39k taxable plus the £12k is £51k I was expecting about £9k’ish in tax but HMRC have taken something like £16k as they have worked out my potential earnings based on how much I’ve earned this tax year which of course includes my redundancy so they think I’m going to ern something like £160k (if I check my tax using hmrc’s app).

So I rang HMRC and the bloke told me to post off my last payslip and a copy of my redundancy letter which includes the amount to PAYE. Anyway a month later I got a letter back saying I’ll have to wait an fill in a self assessment in April!!!!! I already do one as I have a rental property. Anyway I would like the tax paid back NOW thankyou very much as its about £8k! I’ve done a tax calculation and the figures it spits out are

Total Income £81,000.00
Total Taxes £9,189.12
Total Deductions £9,189.12
NET Income £71,810.88

Which is about right, I’ve not included the rental income of £8200 as this is all delt with by PAYE so not applicable for the calculations that were done by HMRC.

Soooooooooo how do I go about getting this back I don’t really want to wait to the next tax year, do a self assessment and then wait some more!

Dazed_and_confused

I may be somewhat out of touch on this area but it sounds right to me.

If you are filing Self Assessment returns then any repayment due will be established when you file your 2018:19 return. You can do this from 6 April 2019 and as long as you complete it accurately there should be minimal wait for any repayment to be credited to your bank account.

Also, your calculation makes no sense. If you have taxable income of £81k (which you seem to have started by saying you didn't have ) then the tax due for the year, excluding rental income, is going to be way more than the £16k you say you have already paid. Are you getting your figures mixed up?

fancyabrew

up to the point I paid the £16k I had only worked for 3 months of the tax year April, May and June so earned about £12k my payout was £69k less £30k which you don't pay tax on so that gives about £50k'ish yet I paid £16k tax on that sum.

£11,850.00 Personal Allowance
£39,150.00 PAYE Taxable
-->Basic @ 20% £34,500 = £6,900
-->Higher @ 40% £4,650 = £1,860
-->Top @ 45% £0 = £0
£8,760.00 PAYE Tax including taxable redundancy should be the figure I paid not £16k

CapricornLass

I think you will find if you dig deeper, that the redundancy payment isn't treated as earned income by HMRC, and is therefore taxed differently (about twice what you would otherwise expect). I got caught out by that when I was made redundant in 2015.

badmemory

CapricornLass wrote: »

I think you will find if you dig deeper, that the redundancy payment isn't treated as earned income by HMRC, and is therefore taxed differently (about twice what you would otherwise expect). I got caught out by that when I was made redundant in 2015.

How was it taxed then? The first 30k should not be taxed but how was the rest taxed if not as normal additional income?

fancyabrew

no redundancy is defo treated as income. The first £30k is tax free then you pay what ever your marginal tax rate is on the rest so in my case £69k - £30k so I should be paying tax on £39k + about £12k that I earned in the 3 months that I worked this tax year so £51k'ish so about £8,700 NOT the £16k that I paid back in July!!!! SO I JUST WANT THE TAX BACK PLEASE!!!!! without waiting until April! just to muddy the waters I've just started work so I had 3 nice months off over the summer. And my tax is now all to !!!!!!!! I can see this being a right old mess until April

Camster

I had a similar situation last year when I took redundancy.

Although HMRC will have based the assessment on projecting your first three months of income for the whole year, it's possible to get them to reassess this.

Once your income from the new job has shown your likely income for the rest of the tax year, you can ask them to reassess their calculation based on your new income. I believe they need to see at least three months of the new income to consider this.

When I did this and it was agreed that I had overpaid tax, and I got it back through a tax refund on the income tax due on my pension.

antrobus

fancyabrew wrote: »

up to the point I paid the £16k I had only worked for 3 months of the tax year April, May and June so earned about £12k my payout was £69k less £30k which you don't pay tax on so that gives about £50k'ish yet I paid £16k tax on that sum.

£11,850.00 Personal Allowance
£39,150.00 PAYE Taxable
-->Basic @ 20% £34,500 = £6,900
-->Higher @ 40% £4,650 = £1,860
-->Top @ 45% £0 = £0
£8,760.00 PAYE Tax including taxable redundancy should be the figure I paid not £16k

That's not the way PAYE works. Assuming you got paid your redundancy in month 3, the calculation would be based on 3/12ths of your PA and the various tax bands.

Check your final payslip.

getmore4less

P50 is the usual route to an early tax refund.

If you get another job or claim JSA you can't use this the refunds come through the tax system for the rest of the year.
If you don't earn enough extra you may not get it all back.

rental income may impede using the P50 route

fancyabrew

right I've checked my tax position via HMRC's app and its sort of sorting itself out a bit it now and recons my income will be around £78k rather than the £160k odd that it was saying a month or so back! which I think will be in the right ball park, with a tax estimate of £16,450 for the year, well I've already paid about that in July! and I now have a tax code of 1185LX D0X the D0X I believe means all my income is being taxed at 40%. I think I'm just going to have to wait until April (

fancyabrew

right I've just had a look at my current tax for the year since April on HMRCs portal

30 April 2018
3,484.39
499.20
355.22
31 May 2018
2,984.39
399.20
295.22
29 June 2018
43,487.56
16,647.55
1,175.37

first number is income second is tax, 3rd Ni so as you can see the June figure is somewhat large. add all the incomes up and its @ £50k and I've paid £17.5k in tax!