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Does anyone know about income tax?

2 replies

HippyKayYay · 11/10/2024 08:59

I've just got a tax rebate via an employer for whom I did a small amount of work a few months ago. I was paid for that work, tax was taken out (a small amount). I've now received another paycheck from them, with a tax rebate that is far in excess of any tax I've paid on earnings from them. It relates to my previous employment I think (I took redundancy earlier this year, so my overall income this tax year will be less than previous years and it pushes me back down into a lower tax bracket). I get that I'm owed a tax rebate because I paid too much tax on my income from my previous employment. I don't get why/how it was paid via this organisation via whom I've paid hardly any tax this year. Can anyone shed any light, before I wait on hold for hours on the HMRC help lines?!?

OP posts:
Chasingsquirrels · 11/10/2024 09:07

Sounds fine.

Tax is cumulative over the course of the tax year. If you have paid too much in a previous employment then HMRC has this money, if your pay drops such that your cumulative tax to date is lower than you've already had deducted then HMRC refund this money via the PAYE system.
It doesn't affect either employer as they are merely a collector and remitter of the tax.

HippyKayYay · 11/10/2024 15:36

Ah, I see. Thank you so much @Chasingsquirrels. I don't think I realised that the money was from HMRC, via this employer, but your explanation is very clear!

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