Incorrect Redundancy Payment: Best Option From Tax Perspective

Hi, grateful for your thoughts on the position I find myself in.

Recently made redundant (all in the plan so happy to go) and now essentially early retired and no plans to go back to work.  My pay off was circa £109k and I’d instructed my employee to put £46k into my APeC (using all available allowances from this and the previous 3 tax years) and pay the rest to me, the first £30k obviously tax free (I’m a higher rate tax payer).

Yesterday, I received circa £73k into my current account so obviously something has gone wrong.  I’ve raised a query which they’re looking into and was just wondering in terms of rectifying the position, would it be better for them to take the whole lot back and reprocess correctly or for me to send any monies due back to them once they’ve worked things out correctly. 

The reason I ask is that I imagine I will need to engage HMRC at some point (under/over payment of tax as I think the redundancy payment was processed after P45 cut off) and just wondered what’s the easiest position to explain or evidence when completing the claim form.  My employer suggested the latter, i.e. send them back any required money, but just have a niggle that what’s easier for them may not be the easiest or best option for me.

Many thanks in anticipation 


  • Dazed_and_C0nfused
    Dazed_and_C0nfused Posts: 12,734
    First Anniversary First Post Name Dropper
    edited 1 December 2020 at 7:43PM
    HMRC will work off what your employer has filed under the Real Time Information system.

    So you need to ensure the employer files the correct information before you contact HMRC.

    You can probably see what has been filed so far by looking at your Personal Tax Account.
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