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Employee sign on bonus - Paying back plus tax
hodd
Posts: 189 Forumite
in Cutting tax
Hello all
I started a new job earlier this year and received a few thousand pounds as a sign on bonus. I signed a contract to say that I would have to pay back a proportional amount if I left within two years. The bonus came with my first months pay and was subject to tax.
A few months on and I’m moving on, and as agreed I will pay back a proportional amount of the bonus. As expected, I have to pay back the gross amount. This would normally be deducted from the final salary payment, but the payroll was processed without this deduction. I’m happy to pay it back immediately via bank transfer, but I’d like to reclaim the proportional tax I had to pay.
When I come to do my self assessment tax return, how will I be able to prove I have repaid the proportional (gross) amount?
I started a new job earlier this year and received a few thousand pounds as a sign on bonus. I signed a contract to say that I would have to pay back a proportional amount if I left within two years. The bonus came with my first months pay and was subject to tax.
A few months on and I’m moving on, and as agreed I will pay back a proportional amount of the bonus. As expected, I have to pay back the gross amount. This would normally be deducted from the final salary payment, but the payroll was processed without this deduction. I’m happy to pay it back immediately via bank transfer, but I’d like to reclaim the proportional tax I had to pay.
When I come to do my self assessment tax return, how will I be able to prove I have repaid the proportional (gross) amount?
0
Comments
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It seems this is a complex area but this seems to have similar facts
https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim00810
There’s quite a lot of manual pages - might be worth writing to HMRC to get their advance clearance for relief under section 128 ITA 2007.0
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