Paying back bonus after receiving P45

marmaluke · 6 July 2018 at 4:52PM

Hi guys,

Sorry if this is in the wrong section, but hoping somebody could help.

I left my previous employer fairly recently and have just received my P45. Whilst there, I received a bonus which was on the condition that i stayed a couple of years, otherwise I was supposed to pay this back. They, however, haven't asked for this money back and have given me my P45. A fair bit of tax was taken off the bonus, and the way it read was such that I would have to repay the full amount - so I would have to stump up the extra cash until I could claim that tax back.

Now that they have given my P45, are they in a position to still request this money back, if they want to? (There's a good chance they have just allowed it to go)

Hope that makes sense!

Any help much appreciated.

Thrugelmir · 6 July 2018 at 10:06PM

There was nothing to be gained by withholding your P45.Reclaiming your bonus is a separate matter.

marmaluke · 6 July 2018 at 10:18PM

Thrugelmir wrote: »

There was nothing to be gained by withholding your P45.Reclaiming your bonus is a separate matter.

I don’t think I made myself clear in the original post. They have given me my P45. I was wondering if they can come back to me at a later date and expect that money back after they’ve ‘closed my file’, as it were.

Thanks

jimmo · 6 July 2018 at 10:42PM

The P45 is a tax document which should accurately reflect the amounts you have been paid and the tax deducted. It has nothing to do with your relationship with the employer.
The employer's right to recover the bonus money paid to you in good faith arises from your employment contract or the bonus scheme. That is a completely separate matter and the issue, or not, of a P45 has no relevance.
When the employer deducted tax they didn't keep it for themselves. They handed it over to HMRC on your behalf and that money has been credited to your name in HMRC's books.
If the employer requires you to repay the bonus they want their money back, in full, from you. If they asked you to repay the net amount and asked HMRC to repay them the tax deducted HMRC would refuse because its not the employer's money that HMRC are holding, its yours.
If required, you will have to repay the employer the full amount of the bonus and seek repayment of any overpaid tax from HMRC and, to achieve that in the best possible time, you will almost certainly need the employer's co-operation. So don't fall out with them.

marmaluke · 6 July 2018 at 10:49PM

jimmo wrote: »

The P45 is a tax document which should accurately reflect the amounts you have been paid and the tax deducted. It has nothing to do with your relationship with the employer.
The employer's right to recover the bonus money paid to you in good faith arises from your employment contract or the bonus scheme. That is a completely separate matter and the issue, or not, of a P45 has no relevance.
When the employer deducted tax they didn't keep it for themselves. They handed it over to HMRC on your behalf and that money has been credited to your name in HMRC's books.
If the employer requires you to repay the bonus they want their money back, in full, from you. If they asked you to repay the net amount and asked HMRC to repay them the tax deducted HMRC would refuse because its not the employer's money that HMRC are holding, its yours.
If required, you will have to repay the employer the full amount of the bonus and seek repayment of any overpaid tax from HMRC and, to achieve that in the best possible time, you will almost certainly need the employer's co-operation. So don't fall out with them.

That's exactly what I was after, thanks very much. I have no intention of falling out with them and am more than willing to cooperate. Was just curious how things stood.

Paying back bonus after receiving P45

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