Tax refund through PAYE or claim from HMRC?

Molly56

My husband was employed and paid through PAYE by his employer until he was made redundant last October.

He was originally paid weekly but put on furlough from March 2020 until he was made redundant.

When I checked his account on Government Gateway I discovered that there were two occasions when a tax refund occurred whilst employed. .

The first was the last week of 2019/20 were his gross pay was recorded as nil and a tax refund of approx. £20 was shown in the tax column; the second was at the end of his employment where his employer had put through an adjustment (he had overpaid him by £400 at the beginning of the year when furlough started but did not put adjustment through until after his leaving date); this generated a refund of approx. £100.

Neither of the above amounts had been paid to him in his net take home pay.

We questioned these with his employer but he said that he would have to claim these amounts from HMRC.

Is this possible and if so how do I do it? Which form is required?

I wrote to HMRC in December 2020 and received a reply which clearly stated that his employer should have paid these amounts through wages – his employer is adamant it is not his responsibility.

We have taken this to an employment tribunal where we were directed to make a self assessment claim for any tax refund which is due to him.

I am confused by this as don’t see how HMRC will refund tax that they have already told us that his employer should have paid through his wages – surely they won’t refund the same amount twice.

Also why should he be claiming through self assessment when he has only ever been paid under PAYE and has no other taxable income other than his state pension which HMRC know.

Any help or advice would be appreciated

 

Footnote: HMRC have already calculated his tax for the year 2020/21 and issued a P800 and tax refund – this was based on the P45 figures which we agree are correct (other than the tax being less than the amount actually deducted) and agree with the gross and tax figures on Govt Gateway – this is a separate issue to the tax refund I am asking about above.

On a separate note, his employer never issued him with payslips so I have had to rely on Govt Gateway to know what deductions were made / tax he paid which is how I discovered these errors – the issue of no payslips was raised at the tribunal and was dealt with by the judge.

AskAsk

tax refund are done through HMRC sending the employer new tax codes.  they would have written to you at the end of the appropriate tax year to let you know that the tax code had changed and passed on to the employer.  did you receive such letters?

Molly56

AskAsk said:

tax refund are done through HMRC sending the employer new tax codes.  they would have written to you at the end of the appropriate tax year to let you know that the tax code had changed and passed on to the employer.  did you receive such letters?

The correct tax code was applied - the error occurred because the employer messed up on the payroll and didn’t realise tax refunds had been generated and he should pay this to my husband in next pay packet. In the first instance because a nil gross figure was put through on week 52 of previous tax year and on the second because he had overstated the gross figure in June 2020 by £400 but didn’t adjust on payroll until Nov 2020 after leaving date (despite us raising it as an issue in July)
Had payslips been received both of these errors would have been noticed and hopefully corrected earlier. Though saying that he is still adamant that tax refunds are not his responsibility!!!….and despite my numerous efforts to explain otherwise (and letters from HMRC) he still maintains this stance. 

AskAsk

Molly56 said:

AskAsk said:

tax refund are done through HMRC sending the employer new tax codes.  they would have written to you at the end of the appropriate tax year to let you know that the tax code had changed and passed on to the employer.  did you receive such letters?

The correct tax code was applied - the error occurred because the employer messed up on the payroll and didn’t realise tax refunds had been generated and he should pay this to my husband in next pay packet. In the first instance because a nil gross figure was put through on week 52 of previous tax year and on the second because he had overstated the gross figure in June 2020 by £400 but didn’t adjust on payroll until Nov 2020 after leaving date (despite us raising it as an issue in July)
Had payslips been received both of these errors would have been noticed and hopefully corrected earlier. Though saying that he is still adamant that tax refunds are not his responsibility!!!….and despite my numerous efforts to explain otherwise (and letters from HMRC) he still maintains this stance. 

so has he actually paid the excess tax to HMRC?  if HMRC is not refunding you then it would appear that the employer has kept the money and so it is not with HMRC to pay you back?

Molly56

AskAsk said:

Molly56 said:

AskAsk said:

tax refund are done through HMRC sending the employer new tax codes.  they would have written to you at the end of the appropriate tax year to let you know that the tax code had changed and passed on to the employer.  did you receive such letters?

The correct tax code was applied - the error occurred because the employer messed up on the payroll and didn’t realise tax refunds had been generated and he should pay this to my husband in next pay packet. In the first instance because a nil gross figure was put through on week 52 of previous tax year and on the second because he had overstated the gross figure in June 2020 by £400 but didn’t adjust on payroll until Nov 2020 after leaving date (despite us raising it as an issue in July)
Had payslips been received both of these errors would have been noticed and hopefully corrected earlier. Though saying that he is still adamant that tax refunds are not his responsibility!!!….and despite my numerous efforts to explain otherwise (and letters from HMRC) he still maintains this stance. 

so has he actually paid the excess tax to HMRC?  if HMRC is not refunding you then it would appear that the employer has kept the money and so it is not with HMRC to pay you back?

I don’t know the answer to that one as I clearly have no authority to discuss his employers PAYE account with HMRC but I have suggested to them in a letter that they look at it. Asking questions of employer is futile as he won’t respond and don’t even know if he will know the answer anyway. It shouldn’t be difficult for the HMRC to work out though as there was only one employee on the payroll and that employee is now redundant!

Ideal scenario would be for HMRC to pay the refund to my husband and then investigate to recover from employer if necessary …don’t know if that is a possibility…...this whole scenario has taken up such a lot of my time and just want to do something more exciting.

Having already gone through another tribunal a couple of months ago to get redundancy payment from same employer I think it is time to move on…..just tying up loose ends and getting what is due first. 

AskAsk

Molly56 said:

AskAsk said:

Molly56 said:

AskAsk said:

tax refund are done through HMRC sending the employer new tax codes.  they would have written to you at the end of the appropriate tax year to let you know that the tax code had changed and passed on to the employer.  did you receive such letters?

The correct tax code was applied - the error occurred because the employer messed up on the payroll and didn’t realise tax refunds had been generated and he should pay this to my husband in next pay packet. In the first instance because a nil gross figure was put through on week 52 of previous tax year and on the second because he had overstated the gross figure in June 2020 by £400 but didn’t adjust on payroll until Nov 2020 after leaving date (despite us raising it as an issue in July)
Had payslips been received both of these errors would have been noticed and hopefully corrected earlier. Though saying that he is still adamant that tax refunds are not his responsibility!!!….and despite my numerous efforts to explain otherwise (and letters from HMRC) he still maintains this stance. 

so has he actually paid the excess tax to HMRC?  if HMRC is not refunding you then it would appear that the employer has kept the money and so it is not with HMRC to pay you back?

I don’t know the answer to that one as I clearly have no authority to discuss his employers PAYE account with HMRC but I have suggested to them in a letter that they look at it. Asking questions of employer is futile as he won’t respond and don’t even know if he will know the answer anyway. It shouldn’t be difficult for the HMRC to work out though as there was only one employee on the payroll and that employee is now redundant!

Ideal scenario would be for HMRC to pay the refund to my husband and then investigate to recover from employer if necessary …don’t know if that is a possibility…...this whole scenario has taken up such a lot of my time and just want to do something more exciting.

Having already gone through another tribunal a couple of months ago to get redundancy payment from same employer I think it is time to move on…..just tying up loose ends and getting what is due first. 

hmrc will not refund you tax they have not received.  if the overpaid tax has been taken by the employer either intentionally or by mistake and not passed on to HMRC, then you will need to go after the employer to get the money owed.  HMRC will not take responsibility for persuing the employer for you.

you need to ask HMRC how much tax they had taken over the year and see if that is in excess of what they believe they are entitled to.  if there is no excess then the employer still has the money!

Molly56

Don’t see how HMRC will tell me how much has been paid over in deductions by employer as they don’t have the authority to discuss his employers PAYE account with me…..all I can do is tell them what I know and suggest that they look into it….which is what I have done. 

General_Grant

Molly56 said:

Don’t see how HMRC will tell me how much has been paid over in deductions by employer as they don’t have the authority to discuss his employers PAYE account with me…..all I can do is tell them what I know and suggest that they look into it….which is what I have done. 

HMRC should be able to confirm to your husband their record of what they have received in respect of his account - that's because they can discuss with him what has been received.  However this is not about what HMRC have received but what the employer has stated they have done by way of refunds and the discrepancy between that and what they have actually paid into your husband's bank account.
So you have to pursue this with the employer, sending a letter before action if you are sure no refund has been made and that other payments are in line with what was due.

AskAsk

Molly56 said:

Don’t see how HMRC will tell me how much has been paid over in deductions by employer as they don’t have the authority to discuss his employers PAYE account with me…..all I can do is tell them what I know and suggest that they look into it….which is what I have done. 

your husband will need to speak to HMRC as they won't speak to you.  they will do so if he gives authority on the phone to discuss the issue with you so they would go through security with him before he passes the phone to you.  can your husband not speak to HMRC direct himself?  it would make things a lot easier.

molerat

The on line tax account shows what the employer has recorded as wages paid and tax deducted / refunded. They will have settled up with HMRC according to those figures.  If the amounts do not tally with what has been received then it is down to the employer to pay up.  Write a letter, sent with free proof of postage, asking for the amounts and if nothing received after 2 weeks send a another letter restating the request and that if nothing is received in the next 2 weeks then legal action will be commenced without further notice.

Molly56

AskAsk said:

Molly56 said:

Don’t see how HMRC will tell me how much has been paid over in deductions by employer as they don’t have the authority to discuss his employers PAYE account with me…..all I can do is tell them what I know and suggest that they look into it….which is what I have done. 

your husband will need to speak to HMRC as they won't speak to you.  they will do so if he gives authority on the phone to discuss the issue with you so they would go through security with him before he passes the phone to you.  can your husband not speak to HMRC direct himself?  it would make things a lot easier.

I already have the authority to speak with HMRC regarding his tax affairs ….this was agreed with officer who responded to my last letter and evidently is marked on his account as such….is easier for me to deal with it as have sorted all the figures using my accountancy background and know the situation inside out by now.