To think there is no way he is getting his money back

[Logiclady94]

Evening all, I am just hoping to get some advise on how to get some overpayment if Tax back. I’ve looked it up online and I cannot find anything solid information wise.

So long story short my husband was let go in June and he was told he would get his normal wage in June then he would get 2 months salary for July and August. He actually got paid both of those salaries in one payment in July and as a result he ended up paying £900 in Tax.

He started a new job in July so luckily we didn’t go any month without income and I returned from maternity leave in October and I used all my outstanding annual leave from last year for September so I had a whole months salary in case he didn’t get a job and we needed the money.

I am just wondering how we go about getting this money back or is it a no go?

He didn’t have to work a notice period at all, the day they told him was his last day at work. He got told he would be getting two months salary in lieu of notice and they were paid on one wage in July.

Basically he was originally coming home with £1465 every month after tax. He should have basically two x £1465 which equates to £2930. He came home with £2174. His annual salary was £22000. He paid £374 in income, £255.44 in NI & a student loan of £117.

His gross on that last wage slip was £2920 which is what he should have received without any tax at all.

I am so confused as to what this means...

@LaPampa

He would have expected to pay tax on both July and August separately though? So was the £900 payment higher than two “normal” tax payments?

Pretty sure that at the end of the tax year you can calculate how much you earned and how much tax you should have paid and reclaim the difference if you have overpaid. (By you, I mean him obviously)

this. Was it not just higher tax because it was a higher payment thus nothing to refund?

@Logiclady94

He didn’t have to work a notice period at all, the day they told him was his last day at work. He got told he would be getting two months salary in lieu of notice and they were paid on one wage in July.

Basically he was originally coming home with £1465 every month after tax. He should have basically two x £1465 which equates to £2930. He came home with £2174. His annual salary was £22000. He paid £374 in income, £255.44 in NI & a student loan of £117.

His gross on that last wage slip was £2920 which is what he should have received without any tax at all.

I am so confused as to what this means...

if his gross was £2920, he must not have been paid 2 full months. Perhaps he had taken too much holiday or didn't work the full month or something? If the gross was lower than 2x it makes sense that the net after tax was lower than you expected too

It was only a higher payment because it was two months worth in one month. Every month his take home was £1465 which two months of that would equate to £2930. If he had got a payment in July and August separately than we would have that rather than the £2173 that he came home with in July

He had taken too much holiday for his annual amount but he was advised they would not be asking for that back. His last working month was June and he got paid like normal as his payroll had been done for that month.

They advised that he would then get 2 months salary from that period. Don’t know why it would be less than the set amount he was receiving each month.

As people have said it's usually quite confusing to try and figure out yourself but the system works out in the end in my experience. Either gets adjusted during the year or a cheque/payment at the end of the tax year. I don't think it's worth the hassle of phoning - just see how it comes out in the wash. Also you can access your tax information online now which might help, go through Gov.uk to personal tax account.

@Logiclady94

It was only a higher payment because it was two months worth in one month. Every month his take home was £1465 which two months of that would equate to £2930. If he had got a payment in July and August separately than we would have that rather than the £2173 that he came home with in July

I completely understand what you are saying but you're focusing on what you calculated his post tax sum to be when actually the key here seems to be that the gross sum he was paid wasn't 2 x his usually monthly salary, was it? So of course the post tax sum also wasn't 2 x what it normally is.

It may be that they have deducted holiday where he has taken more than the pro rata amount he had accrued by then (alot of people, not expecting to be let go, take more holiday earlier in the year than later so if they leave earlier than expected they have taken more holiday than they actually accrued which is adjusted when they leave)

@Logiclady94

He had taken too much holiday for his annual amount but he was advised they would not be asking for that back. His last working month was June and he got paid like normal as his payroll had been done for that month.

They advised that he would then get 2 months salary from that period. Don’t know why it would be less than the set amount he was receiving each month.

it seems obvious that they have taken off the extra holiday. It should show on the pay slip. You're focused on the tax which is a red herring. What he should be asking is for clarification as to why his gross was lower than expected and what they have deducted.

@Newmumatlast- yeah he should have asked actually. I love DH but he never does any admin type stuff himself. It infuriates me to high hell as I do everything.

He didn’t even know the password to his wage slips from 2017 when he started to his last month. He never set up his pension account. I have sorted all this out now on his behalf now.

We don’t need the money we were only going to put it into our moving fund or the kids savings or something to that effect but we aren’t needing it.

I am going to leave it and not chase it up for him anymore. He’ll get his P60 (I think that’s his annual tax information) and see if he gets a refund of any amount

He won't actually be due tax back. For ease, say his tax free allowance is £12,000 which it's thereabouts - this gets split up into £1000 a month, and everything above that is at 20% unless he's a higher earner.

So in June he got his normal pay, £1000 tax free, the rest 20% tax.
In July he got 2x pay, £1000 tax free, the whole of the rest of the amount 20% tax. His tax bill would be higher that month than June + July tax free.

Now, because he started a new job straight away, in August new job will have paid him £1000 tax free, the rest 20%, and will keep doing that till March. So your DH has used up 12 lumps of tax free-ness and everything else is at 20%.

If he'd been paid the lump portion split across the year, he'd have been taxed on it equally each month anyway. As tax bills are annual, it will all equate to the same amount at the end

Thank you so much for your advice everyone! I really appreciate it, I said I’d look into it for him as he is clueless about this sort of stuff so I really appreciate everyone’s help.

I think we can conclude he won’t get it back, which like I say it isn’t a massive issue. We were looking forward to the extra money as we knew he was starting a new role before we wouldn’t have any income from him but we didn’t need it to cover any bills

By the time he gets to his March pay he will have paid the right tax, he won't get it back as he got paid that money and will pay tax on it, he probably has a tax free allowance of £12,500 and anything over that he will be taxed on. As long as he gave his new employer his P45 it should be resolved by now.

The 20/21 tax allowance is £12,500. Does his payslip say 1250L for his tax code? If yes, PAYE divides this tax allowance into 12 months meaning that the first £1041.67 of earnings each month is tax free. All earnings above this amount are taxed @ 20%. You also pay 12% National Insurance on earnings above £793 per month.

Once he starts with the new employer they should get his correct tax code and previous earnings and tax.

Once they put him onto a cumulative tax code his tax will be adjusted.
It might be worth a call to HMRC as they can speed it up

Similar happened to me and on my second payslip in new job the tax refund was on there, be careful if your on universal credit aswell, as they take the refund as income which at the time I didn’t realise. X

I think we can conclude he won’t get it back, which like I say it isn’t a massive issue.

No, I think you can assume that you will.

He will get it back, but not very noticeably. Like the £62 tax I'll be getting back for a wfh claim. Over 5 months I'll not really notice it!

He’ll get it back eventually. This happened to me when I changed jobs as I went being paid at the end of the month to the middle of the month so got paid “twice” in the same month (although not a full months’ salary). I got 3 different letters from HMRC saying I they were changing my tax code because 1. I had two jobs at once, 2. had no job at all and 3. had changed job 🤣 I got an automatic rebate in the end.

As others have said, your biggest problem is that he didn’t get two months pay as promised. The gross should have been £3,667 (based on 2 months of his £22,000 salary) which would have increased his take home amount. He should query that with his ex employers.

But, I think he would have to pay the extra tax as he went straight into another job, so has used his allowance each month of the year.

From the detail you have given he hasn't over paid his tax.

Everyone has a yearly tax free pay which for most people is split into 12 portions, you get a portion every month and any earnings above that are taxed at 20% (there are higher rates for higher earners but will assume lower earner for this example).

Tax free pay is £12,000 per year (i know for most it is a bit more than this but trying to keep figures simple).

You earn £24,000 per year.

Each month you earn £2,000 so first £1,000 is tax free, you pay 20% tax on the remaining £1,000 so your monthly tax is £200.

In july your husband earned £4,000 but still only gets £1,000 tax free pay for july as isn't yet entitled to august tax free pay.

£4,000 less £1,000 tax free leaves £3,000 to pay tax on so his tax bill is £600 - not double his normal monthly tax bill of £200 as he has to pay tax on on £1,000 that isn't tax free yet.

Now if he hadn't got a new job in august he would have another £1,000 tax free pay due and so would be due the extra £200 back he paid.

However, in this case he did get a new job, lets assume same wage so he received another £2,000 in august, his tax free pay was used so £200 tax paid.

That extra £200 tax isn't now due back, it was deducted correctly as basically your husband is going to receive 13 months pay this year and not 12. So instead of receiving £24,000 (and paying (2,400 tax) he will get £26,000 (so pay £2,600 tax).

I hope that explains it for you op.