Employer overpayment returned. How to get HMRC to understand.

michaels

My employer paid me an extra £900 which I returned via an invoice they raised. However my ytd taxable income according to my employer still includes the overpayment.

No doubt HMRC will therefore think this is part of my taxable income and want me to pay income tax on it. The employer is a large govt department who are not even responding to my requests to fix my pay record.

I complete a self assessment but of course there is no box for this. How am I going to avoid paying tax on this non-existent pay? Thanks

Isthisforreal99

Your employer ahould file an amended PAYE return to reflect the -£900. When did you repay the money and was it the gross or net amount (assuming tax/NIC was deducted)

dermino939

The employer needs to issue a Full Payment Submission (FPS) amendment to HMRC. I had a similar mess with a payroll error and it took forever for them to update the figures. You shouldn't have to pay for their mistake, so keep chasing their HR. It's on them to fix the Year to Date data.

michaels

https://forums.moneysavingexpert.com/discussion/comment/81937577#Comment_81937577

Being 900 in a month where I wasn't otherwise paid, no tax was deducted and it was also non pensionable so no problem with that either so I simply returned the gross amount paid.

penners324

You should have waited for an updated payslip.

The employer has to sort it.

If they dont demand the money back

Grumpy_chap

https://forums.moneysavingexpert.com/discussion/comment/81938839#Comment_81938839

That will still leave your annual income figures incorrect. And also for the purposes of any means-tested benefits (if applicable) will be incorrect.

Your employer should have reversed the payslip and then withheld the net amount of the overpayment from the future salary payments. (Possibly not all at once.)

The way they have invoiced you means that £900 will show as business turnover and also (now) includes VAT.

Lots wrong in the way this has been processed. I am very surprised that a large organisation does not have a payroll experienced at how to correct errors of this nature. Did the repayment go through payroll or was it a local team leader that thought they'd try to fix it?

chrisbur

You advise earlier that no tax was deducted but was there any tax rebate included in the £900.

michaels

I worked for the employer to the end of April then started an unpaid career break. In August they incorrectly paid me the unconsolidated part of the wage deal, my total taxable income year to date resulted in no tax being deducted although there was no rebate of tax already paid in April. As I may not return I opted out of it being recovered from pay at some future date so they sent me an invoice which I paid. This was all done by the payroll department not a local team.

Isthisforreal99

Have you checked your personal tax account to what has actually been reported to HMRC? Or are you still getting payslips from your employer showing the incorrect figure?

michaels

https://forums.moneysavingexpert.com/discussion/comment/81939510#Comment_81939510

Payslip and hmrc records both show the overpayment. :(

molerat

There is nothing for HMRC to understand, it is for the employer to correct. They have paid you through PAYE reporting, they need to reverse that payment through the PAYE system. Maybe worth contacting HR again and ask them for a copy of their formal grievance procedure - might make them think about it.