Meet the Other Phone. Child-safe in minutes.

Meet the Other Phone.
Child-safe in minutes.

Buy now

Please or to access all these features

Money matters

Find financial and money-saving discussions including debt and pension chat on our Money forum. If you're looking for ways to make your money to go further, sign up to our Moneysaver emails here.

Tax refund through payroll

3 replies

rolotops1 · 08/06/2022 23:08

This is a little complicated. I was paid a large salary in April (inclusive of backdated bonus and commission) and due to a number of reasons was on an emergency tax code and very heavily taxed. It's taken until now to sort the correct tax code with HMRC and they have advised I may receive a refund through payroll for any overpaid tax.

As I am due to go on maternity leave for the majority of the year my estimated income is substantially lower than normal. For arguments sake say I have paid £3.5k in income tax since April, but my estimated tax liability for this year is only £1.8k, will the full difference be refunded next month with no further tax to pay for the year? Or if not how does it work?

OP posts:
nannynick · 08/06/2022 23:16

If HMRC has issued a Cumulative Tax Code, then the payroll software will recalculate taxes due to the end of the current pay period. Then compare with the taxes deducted, and thus provide a refund.

You may get a refund on Income Tax via payroll for a few months. No idea why it is sometimes spread across months.

rolotops1 · 08/06/2022 23:20

nannynick · 08/06/2022 23:16

If HMRC has issued a Cumulative Tax Code, then the payroll software will recalculate taxes due to the end of the current pay period. Then compare with the taxes deducted, and thus provide a refund.

You may get a refund on Income Tax via payroll for a few months. No idea why it is sometimes spread across months.

Yes I'm now on a cumulative tax code. By current pay period do you mean this month? Or tax year? Or from April until now?

OP posts:
nannynick · 08/06/2022 23:50

Common Pay periods are monthly, weekly, or two weekly.
So if you are paid monthly, April, May and June are months 1, 2 and 3, this tax year. Pay in month 3 with a cumulative tax code would see a recalculation of the taxes due for the total of months 1, 2 and 3.

New posts on this thread. Refresh page