Overpayment nhs

[MegCleary]

Bear with this is odd and long.
I was overpaid in jan 2023 about £2000. Had started new job and payroll got start date wrong and my tax code. Started a repayment plan in March and paid it all back by October. The I heard from hmrc saying I owed £900 tax. When I looked back due to the overpayment and sorting tax code I paid no paye in jan, feb march. Fair enough oversight on my part but sorting the overpayment was very stressful. Work said only I can speak to hmrc so I do and they asked for an earlier year update from payroll. They said I do owe for those three months but not £900 as I don’t earn enough to owe that. Payroll and the trust say no to this.

The reason for this is due to the overpayment happening at the end of the financial year and only being corrected in this year, which is what likely triggered the notice from HMRC regarding underpaid tax. The fact that you’ve repaid the overpayment also causes issues as it has been corrected on ESR, so in order to trigger an earlier year update with HMRC we would need to put the overpayment back into the system – which would cause it’s own issues.
They had said that while you may have underpaid tax in HMRCs perspective in the last year, you would theoretically overpay this year and it would balance itself out.
However, HMRC are not likely to have the full details regarding the overpayment (which triggered the tax bill you received) and they may have also put you on a higher tax bracket for this year than you should be on.

Payroll have advised that you speak with HMRC, explaining the overpayment and asking them to revisit your tax position for the last and current year

Well done so far!!!

I then asked for what my salary would have been for those three months and contacted hmrc to see if they could use this to work out what I owed.

Hmrc said they had never seen anything like it and consulted another colleague to get advice. Advice from them is they are sending a form to give to work. Work are legally obliged to rerun payroll and the lady at hmrc gave me the contact number for acas and said if they don’t do what the form says threaten with an employment tribunal!
stunned me a bit this one.
any advice dh says it’s hard to sort as it’s a previous tax year. I don’t want to take the hit and just pay but am scared if they don’t agree to compete hmrc form.
honestly this has been so stressful.

Bump

Bumpity bump

Overpayments and repayment that go over a tax year end are a nightmare. It is for your employers payroll to correct.

I am not a payroll person but do have a rough idea of what should happen. Your employer has fucked up, not just overpaying you but by not doing PAYE correctly. I suspect for an easy life (incompetence) they have been fudging the payroll rather than doing it correctly. They need to make sure the payroll system correctly reflects what actually happened. They also need to fill in the form for HMRC.

Ultimately you should pay the right amount of tax, however in 2022/23 tax year you will owe tax on the overpayment as well as your untaxed earnings. In 2023/24 tax year your repayments should come out of gross pay lowering your tax liability for this year. Over the two years your tax should balance out.

You may need to involve senior managers to put pressure on your payroll team who need to talk to HMRC to resolve it. Make it clear the payroll is not compliant and needs to be corrected so it is compliant.

Note: HMRC can advise employers how to process payroll to be compliant with HMRC rules. The fact it is one employee’s record doesn’t make it the employees (your) responsibility to resolve.

Thank you for replying. I have felt so alone in this. HR have never answered the phone. One man in workforce planning has been helping. Being on hold to hmrc over the start of it cost me all my free minutes on my phone so I have a phone bill for a tenner from that. The embarrassing but was I found out about the minutes when I was on a cool to the bank to sort out mortgage. Who lends to who can’t afford to call them!
I asked if work would cover the bill and was told I would have to raise a grievance for it so I didn’t.

@MegCleary use your work phone to call HMRC , perfectly legitimate to use a work phone to sort a work issue.

You may have to raise a grievance to resolve this.

Have you spoken to the Payroll Manager? Usually they are the best placed to sort this.

@Sisterpita i only spoke to my line manager about sorting it on work time this week, am foolish just been trying to sort it myself. They have been supportive but no use. Never spoken to payroll manager. I was thinking about contacting my union but not sure it’s worth it.
I really don’t think payroll will sort it.

Definitely contact your union.

Payroll are the only ones who can sort it, so talk to them.

@Sisterpita Just a quick update. Oh my gosh spoke to my union and they were lovely. Just nice to be heard. I have to send them the form when hmrc send it and they will take it on!
now, it’s not sorted yet but I am a tad more hopeful.

@MegCleary Thanks for the update. I am so pleased they are helping you. I am sure it will get sorted but may take some time.

@Sisterpita well they reran payroll and my tax bill remains the same. Sigh
maybe I do owe it all I remain stressed and confused

I’m sorry the only thing I can suggest is contacting HMRC. .

I think part of the issue is that you were overpaid and paid no tax for 3 months in 2022/23. However, the overpayment was taken out of 2023/24 tax year.

Theoretically you do owe the tax for 22/23 but should then pay less tax in 23/24. I would ask to repay the tax over the 2024/25 tax year via tax code.

@Sisterpita I know I have to pay some tax it’s trying to get clarity on how much I am struggling with

Its too late to ask for the tax to be collected via tax code, the cut off was 30 December

Have hmrc asked you to complete a tax return for 2022-2023?

@PickledPurplePickle HMRC asked payroll to do an earlier year update. Which payroll didn’t want to do and then did after HMRC provided a letter.
never been asked to do a tax return

@PickledPurplePickle I had missed that.
@MegCleary I’m sorry but only HMRC can tell you.

@PickledPurplePickle @Sisterpita i wonder if that’s why payroll waited till January to redo the payroll.
as far as I understood they were to tell HMRC via that payroll run what my salary should have been for those three months and that would have shown how much tax owed.
Perhaps I am wrong. Perhaps I just pay it.
I was paid £6700, for those 3 months. £2100 was overpayment and paid it all back. So from I can figure I owe tax on £4500.
have I gone mad?

I’m in the same situation with civil service was paid incorrectly for 5 months instead of one month - I’ve repaid in full but need to wait til the end of the tax year for my tax rebate of around £2k. If you log into the hmrc app you can check what they have down as your estimated income for this year and manage that down if needed - other than that just have to wait

@mrsbyers my sympathies. I take it you are a paye employee? I cannot see predicted income on the app