Huge work overpayment

Banana5pancakes

Hi everyone,
If anyone can explain the best course of action here I'd really appreciate it.

I came back from maternity leave last year on 30.5.20. I went on the sick because I had postnatal depression and covid just made it worse.

I returned to actual work 1.8.20. I told work at that point I wanted to go part time from 37.5 to 20 hours. No problem they said. I didn't hear anything from work in the build up to my original return date to clarify why I told them at that point.

So I returned on a phased return that would last 8 weeks and by then my change of hours would be done and all would be well.

Except it wasn't, my change of contract has just been put through today so when hr open on Monday they're going to ask for a plan to payback the difference between the full time and part time hours.

I've been putting the net difference aside but I've checked the hr portal and come across some sections I hadn't seen before that states I would have repay gross.

They've also included the months where I was on a return to work as part of the part time contract so that's 8 months in total of about 1k a month gross difference.

My head is about to explode trying to comprehend how this will work with tax, ni, student loan contributions which is money I've not had.

I can't afford to pay back more than 30/40 a month which just seems absurd. 

I've contacted payroll several times to be told they can't do anything until hr amend my contract. Hr told me the request had been lost in December and I had to resubmit it. I've been totally upfront and tried to chase it is as much as I could but got nowhere 

Does the fact we're at the end of the tax year have any implications?

Can someone explain mathematically how paying back the gross amount before deductions doesn't leave me out of pocket because it really feels like it will.

Sorry if this is rambling I've just finished an 11 hour shift.

Savvy_Sue

I think it's reasonable to ask for the repayment to be over the same period as the overpayment, but I can see why it's a struggle to calculate. If you're in a union I'd definitely ask for their help.

However, to explain how I think net and gross works.

Let's say the gross overpayment is £1000. Tax, NI, student loans, pension are all deducted. Net, you are let's say £700 better off.

Now, if you repay £1000 gross that's £1k on which tax, NI, student loans and pension will NOT be deducted, ie the salary on which those things are deducted is lower, so there will be lower deductions. And I believe you should find yourself about £700 worse off, not £1000.

If I've got that wrong, I'm sure someone will correct me.

Marcon

Banana5pancakes said:

Hi everyone,
If anyone can explain the best course of action here I'd really appreciate it.

I came back from maternity leave last year on 30.5.20. I went on the sick because I had postnatal depression and covid just made it worse.

I returned to actual work 1.8.20. I told work at that point I wanted to go part time from 37.5 to 20 hours. No problem they said. I didn't hear anything from work in the build up to my original return date to clarify why I told them at that point.

So I returned on a phased return that would last 8 weeks and by then my change of hours would be done and all would be well.

Except it wasn't, my change of contract has just been put through today so when hr open on Monday they're going to ask for a plan to payback the difference between the full time and part time hours.

I've been putting the net difference aside but I've checked the hr portal and come across some sections I hadn't seen before that states I would have repay gross.

They've also included the months where I was on a return to work as part of the part time contract so that's 8 months in total of about 1k a month gross difference.

My head is about to explode trying to comprehend how this will work with tax, ni, student loan contributions which is money I've not had.

I can't afford to pay back more than 30/40 a month which just seems absurd. 

I've contacted payroll several times to be told they can't do anything until hr amend my contract. Hr told me the request had been lost in December and I had to resubmit it. I've been totally upfront and tried to chase it is as much as I could but got nowhere 

Does the fact we're at the end of the tax year have any implications?

Can someone explain mathematically how paying back the gross amount before deductions doesn't leave me out of pocket because it really feels like it will.

Sorry if this is rambling I've just finished an 11 hour shift.

Marvellous - just what you need on top of becoming a new mum, post-natal depression, COVID and returning to work.

Given the utter screw up your employer has made, you need to ask them to put in writing exactly what overpayment has arisen and why, if you have to repay gross, you will not be out of pocket, giving details under each of the headings income tax, NI, student loan and pension contributions (if you were a member of the pension scheme). When HR open on Monday they can get cracking on your request. They, not you, need to do the legwork here before you can make any proposals in respect of a repayment plan.

Banana5pancakes

I'm not sure if I'm overthinking it.
So if I pay say 50pm gross back off my salary then I am paying less tax obviously but tax is only 20%. So am I not essentially paying £50 back to pay £10 less tax on my wage? It still feels like I'm out of pocket. 
I do really appreciate you both taking time to respond. It is a major !!!!!! up and thankfully we do have a union so I'll be getting in touch with them too. 

Marcon

Banana5pancakes said:

I'm not sure if I'm overthinking it.
So if I pay say 50pm gross back off my salary then I am paying less tax obviously but tax is only 20%. So am I not essentially paying £50 back to pay £10 less tax on my wage? It still feels like I'm out of pocket. 
I do really appreciate you both taking time to respond. It is a major !!!!!! up and thankfully we do have a union so I'll be getting in touch with them too. 

Ensuring you understand something is not overthinking it; it's very good sense.

bartelbe

I wouldn't bet on your HR department being able to work this out, the HR staff I have had encountered haven't been the brightest bulbs in the box. The fact they couldn't something as a simple as switch you from full to part time competently doesn't inspire confidence. They sound like typical HR, a right bunch of clowns.

So I wouldn't assume they even know the difference between net and gross and understand the issue. So as others have said, get them to work it out and put the amounts in writing. Their screwup, their responsibility.

es5595

I might be wrong here, but surely they have to enter into PAYE the overpayment, and THEN they get back the tax and NI, YOU pay the net back (what you actually had in your pocket) and between what you’re paying and the tax refund, they’re square. 

I highly urge you to contact them, in writing, with the questions @Marcon raised, and ensure you have a response in writing too. Also, head straight to your union, they will get this regularly and know what to do! (Please tell us you’re in a union?!). 

TELLIT01

If I understood the OP correctly, part of the concern is that the overpayment was made in one tax year and they are unclear how that will be corrected if that overpayment is recovered in the next.

Savvy_Sue

I'm sure it would be possible to make it tax neutral, but off the top of my head, it seems it would benefit the OP, because personal tax allowance increases in April, doesn't it?

Xbigman

Savvy_Sue said:

I'm sure it would be possible to make it tax neutral, but off the top of my head, it seems it would benefit the OP, because personal tax allowance increases in April, doesn't it?

No. The allowance changes but not the percentage. As long as the part time pay is over the allowance there is no gain to be made. 

Darren

Xbigman

When the employer says gross it depends how the repayment is made. If the employer is going to take the money back through the OP's wages then they should take it back gross but before tax and NI is calculated. That way they are taking back the net amount. The only real issue might be the student loan repayments. Given the OP's drop in income due to going part time they may not earn enough to pay anything off their student loans, therefore the money was paid when it needn't have been and you can't reduce 0 to a negative number with student loans like you can with tax.


Darren