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Overpaid wages and tax mess?

Discussion in 'Pay and conditions' started by sensei123, Apr 11, 2012.

  1. Hi,
    I recently finished a fixed term contract, but was paid for another 6 weeks. The LA has now asked for the money back - luckily I stuck it in savings, but HMRC are now claiming that I have underpaid tax for this year.
    I have been asked to pay the amount after tax back, so surely I will have overpaid if anything?
    Have tried ringing tax office several times - but have been unable to get through.
    Any advice would be appreciated.

  2. coppull

    coppull New commenter

    May I suggest that you use the old fashion method of writing to them with full details of what has happened,with photo-copies of all the paper work.
    If there is an e-mail contact,use that method.
  3. Rott Weiler

    Rott Weiler Star commenter Forum guide

    Are you sure that the two situations are linked (ie that HMRC saying you have underpaid tax is linked to LA overpaying you?). The timing sounds wrong. When you say 'this tax year' which year do you mean? Surely HMRC won't be asking you for underpaid tax on 2011-12 tax year yet - it only finished one working day ago! You have until at least 31st October to submit a tax return for 2011-12 and for HMRC to calculate tax due, if any, and until next January to pay it. Or are HMRC asking you for tax underpaid for 2010-11 year? If so that's presumably unrelated to the LA overpaying you as you describe that as 'recent' which I take to mean within the last year at least.
  4. jubilee

    jubilee Star commenter

    Pay back the amount of take-home pay you received in error.
    Your tax situation (and NI) should then be calculated based on the last valid payslip, plus the earnings and tax paid on work from other employers in the same tax year.
  5. jubilee

    jubilee Star commenter

    If anyone has been employed on PAYE and has earned more than their tax code allowance AND has received JSA or other potentially taxable benefits in the tax year, they will owe tax on those benefits, which will have to be paid direct to the Inland revenue OR they will lower your tax code in the next tax year in order to recoup the missing tax.
    Those who have erratic earnings and/or get JSA for part of the year, should contact the IR for a tax assessment once they get their P60s at the end of a tax year. Some will be owed back overpaid tax and others will owe tax.
  6. Thanks for the advice. HMRC have now written to me with further confirmation - I still owe them some tax as I worked for 2 employers part time both of whom used the same tax code, but once I have repaid the overpaid wages (still waiting for the invoice to allow me to do this) and had an accurate P45 this should be reduced.
    They'll take the money back through a different tax code this year, but I could just do with getting it all sorted as we're getting married in a few months.


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