National insurance overpayments

riotlady · 27 April 2018 at 12:12PM

I'm currently receiving maternity pay from my former employer (my contract ended when I was 7 months pregnant so I still qualified) and I'm massively overpaying on student loans, income tax and national insurance. For example this month, I received £657 maternity pay but from that paid £131 income tax, £59 national insurance and £27 student loans payment, totalling £217- that's nearly a third of my income.

I can't fix the income tax overpayments, so just have to apply monthly for a tax refund (fun!). I'm in the process of trying to sort out the student loans overpayments but having a nighmare because none of the relevant agencies (my employers, HMRC, SLC) will talk to each other.

Now I need to try and sort the national insurance payments. When I try and apply online it says to talk to my employer, but given they've been so astoundingly crap on the other issues and refuse to do anything useful, I don't think they'll be much help. I can cope with waiting until the end of the tax year (I'll just think of it as savings, I guess?) but does anyone know if the annual tax refund that HMRC sends you includes NI overpayments?

chrisbur · 27 April 2018 at 1:21PM

riotlady wrote: »

I'm currently receiving maternity pay from my former employer (my contract ended when I was 7 months pregnant so I still qualified) and I'm massively overpaying on student loans, income tax and national insurance. For example this month, I received £657 maternity pay but from that paid £131 income tax, £59 national insurance and £27 student loans payment, totalling £217- that's nearly a third of my income.

I can't fix the income tax overpayments, so just have to apply monthly for a tax refund (fun!). I'm in the process of trying to sort out the student loans overpayments but having a nighmare because none of the relevant agencies (my employers, HMRC, SLC) will talk to each other.

Now I need to try and sort the national insurance payments. When I try and apply online it says to talk to my employer, but given they've been so astoundingly crap on the other issues and refuse to do anything useful, I don't think they'll be much help. I can cope with waiting until the end of the tax year (I'll just think of it as savings, I guess?) but does anyone know if the annual tax refund that HMRC sends you includes NI overpayments?

I assume that these figures have been rounded. If that is the case then the wage has been calculated as if it was a weekly payment.
Tax may well be correct as your contract has ended and your employer may have issued a P45. If this is the case then code 0T should be used. If a P45 has not been issued then the employer should have continued to use your normal tax code. As you say this will eventually be sorted.
However there will be no automatic checking of NI. The rules regarding NI on payments made after the contract has finished are....
"26 Payments of SMP, SAP, SPP, ShPP and ASPP to
an employee after their contract of service
has ended
For NICs purposes
If you pay SMP, SAP, SPP, ShPP or ASPP to an employee
after their contract of service has ended and you pay it:
!!!8226; in a lump sum !!!8211; work out NICs using a weekly earnings
period unless the lump sum is paid with the last regular
payment of earnings. In that case, add the two payments
together and work out NICs using the earnings period
used before the employee left
!!!8226; at the same interval as regular earnings !!!8211; work out NICs
using the earnings period used before the employee left
!!!8226; at different intervals from regular earnings !!!8211; work out
NICs using the interval between payments"

This means that a monthly pay period should be used by your employer not a weekly pay period.

The quote is from an old guide book, though I cannot imagine that this has changed but I will try to find an up to date reference for it.

The up to date details are at....
https://www.gov.uk/government/publications/cwg2-further-guide-to-paye-and-national-insurance-contributions/2017-to-2018-employer-further-

The section you need is....
2.3.2 Payments of SMP, SAP, SPP and ShPP to an employee after their contract of service has ended

This confirms that you should still be paid on a monthly basis not weekly and also confirms the bit I said earlier regarding tax.

I can only suggest that you aproach your employer with these details and hoprfully they will adjust and correct, if not then you will I assume have to try HMRC to see if they will contact your employer or as last resort make a claim for over-payment of NI at the year end showing how your monthly wage was calculated on a weekly basis.

Best of luck

riotlady · 2 May 2018 at 10:45AM

chrisbur wrote: »

I assume that these figures have been rounded. If that is the case then the wage has been calculated as if it was a weekly payment.
Tax may well be correct as your contract has ended and your employer may have issued a P45. If this is the case then code 0T should be used. If a P45 has not been issued then the employer should have continued to use your normal tax code. As you say this will eventually be sorted.
However there will be no automatic checking of NI. The rules regarding NI on payments made after the contract has finished are....
"26 Payments of SMP, SAP, SPP, ShPP and ASPP to
an employee after their contract of service
has ended
For NICs purposes
If you pay SMP, SAP, SPP, ShPP or ASPP to an employee
after their contract of service has ended and you pay it:
!!!8226; in a lump sum !!!8211; work out NICs using a weekly earnings
period unless the lump sum is paid with the last regular
payment of earnings. In that case, add the two payments
together and work out NICs using the earnings period
used before the employee left
!!!8226; at the same interval as regular earnings !!!8211; work out NICs
using the earnings period used before the employee left
!!!8226; at different intervals from regular earnings !!!8211; work out
NICs using the interval between payments"

This means that a monthly pay period should be used by your employer not a weekly pay period.

The quote is from an old guide book, though I cannot imagine that this has changed but I will try to find an up to date reference for it.

The up to date details are at....
https://www.gov.uk/government/publications/cwg2-further-guide-to-paye-and-national-insurance-contributions/2017-to-2018-employer-further-

The section you need is....
2.3.2 Payments of SMP, SAP, SPP and ShPP to an employee after their contract of service has ended

This confirms that you should still be paid on a monthly basis not weekly and also confirms the bit I said earlier regarding tax.

I can only suggest that you aproach your employer with these details and hoprfully they will adjust and correct, if not then you will I assume have to try HMRC to see if they will contact your employer or as last resort make a claim for over-payment of NI at the year end showing how your monthly wage was calculated on a weekly basis.

Best of luck

Sorry for the delay in replying, everything is a bit hectic atm.

Thank you so much for the detailed info. You're right, they're calculating it on a weekly basis so hopefully with that link they should fix it (I have finally convinced them to stop taking the student loans! Woohoo!).

riotlady · 19 May 2018 at 10:35PM

They're still reluctant to fix it. The lady I have been emailing and getting nowhere with has referred it to her team leader, but I haven't heard anything for the past 2 weeks (did email about a week ago asking if they'd heard anything and was told no). Was hoping I'd get it sorted by the next payday but it's looking unlikely

I guess my next step if they still don't get back to me is to file a grievance? Not going to win me any friends but can't see what else to do.

Brynsam · 20 May 2018 at 12:48AM

riotlady wrote: »

I guess my next step if they still don't get back to me is to file a grievance? Not going to win me any friends but can't see what else to do.

Employers aren't required to deal with grievances raised by former employees, and if they are as disorganised as this one sounds it may not get you far - but give it a go. Worth having a word with ACAS's helpline: http://www.acas.org.uk/index.aspx?articleid=4489

chrisbur · 20 May 2018 at 8:56AM

Might be worth contacting HMRC explaining that you are receiving a monthly payment which is being treated as a weekly payment resulting in over-deduction of NI. I would hope that in a case like this they would be prepared to contact the employer about this; they would have in my day but that was a few years ago.

riotlady · 21 May 2018 at 7:48AM

Employers aren't required to deal with grievances raised by former employees, and if they are as disorganised as this one sounds it may not get you far - but give it a go. Worth having a word with ACAS's helpline: http://www.acas.org.uk/index.aspx?articleid=4489

Thank you for the advice. The lady I was dealing with has gone on leave, so I've sent another email to the address she's listed in her out of office note. May be a vague hope but perhaps I'll be redirected to someone more helpful? I feel like this one is being deliberately obtuse. If they're no help I'll try the ACAS line.

Might be worth contacting HMRC explaining that you are receiving a monthly payment which is being treated as a weekly payment resulting in over-deduction of NI. I would hope that in a case like this they would be prepared to contact the employer about this; they would have in my day but that was a few years ago.

Thanks. When I was trying to sort out the SLC deductions HMRC did try and ring them on my behalf but couldn't get through, might be worth another go though.

riotlady · 22 May 2018 at 5:38PM

Got a reply from someone else and they say it'll be sorted! Woohoo!!

National insurance overpayments

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