Refund Cheque from HMRC

Naomim

My husband received notification from HMRC he was due a refund on his PAYE tax payments.   Within a week his employer sent a companywide email to say anyone who had received this would owe the tax back as they were behind with their reporting.

We have now received a cheque from HMRC but I'm not sure if we should bank it. If we bank it, I assume the HMRC will adjust his tax code and claim the money back via PAYE. However if we don't bank it, his tax code shouldn't change but I'm not sure how long it will take them to recognise it's not been cashed or will they just adjust his tax code anyway?

Thanks

Naomim

Dazed_and_C0nfused

If you want to keep things simple then just return the cheque and explain why.

Should be no need for any tax code adjustments then.

Naomim

Dazed_and_C0nfused said:

If you want to keep things simple then just return the cheque and explain why.

Should be no need for any tax code adjustments then.

Doh! I never thought of that!  Thank you.

molerat

How far behind with reporting are they ?  What is it they should have reported ?  It should be fairly easy to work out if the money is due or not and if it is you have an interest free loan.

Thrugelmir

Bank the cheque. Will reduce confusion. 

KingOfSnake

Go back to the company and ask exactly what they were behind with. It sounds like (especially at this time of year) P11D reporting of his benefits-in-kind (BIK) such as private medical insurance (e.g. BUPA), company car, company van, fuel benefit etc. If they hadn't submitted the P11D then HMRC will probably assume £0 BIK for 2020/21 (year to 5th April 2021) and, assuming the benefit was already 'coded-out' will not only refund the tax he paid each month but send him a new larger code for 2021/22 (again, generating a refund via his salaried payroll). 
At this stage, as they said, I would not cash the cheque. HMRC's unusal accounting system can mean that interest is charged even if you give it 100% back at a later stage. Hang-on, ask the company what went wrong and why the refund was generated and if they have rectified the problem.
If the company does not help (or is really behind and so does not resolve it) you can phone HMRC and ask for 'Employer Compliance' and they will help to facilitate the resolution.

Naomim

Thanks, he doesn't get any benefits in kind. To be honest, they aren't the most approachable about anything.

Dazed_and_C0nfused

Was the refund in the region of £205-£210?

Naomim

No it was £600