Can anybody help DP with this tax and overpayment of wages issue?

[TidyDancer]

The long and the short of the problem is that he has been overpaid three times recently and is now being asked to pay it back. Obviously this is okay, and we will be paying it back, but the kicker is the tax. Technically, DP is being asked to pay his employer money that he never received in his bank account. While we will be able to get this money back in the form of a tax rebate after April, in the meantime, we will be several hundred pounds down until then. We're not on the bare bones of our arses financially, but this will make things very difficult for us until we get that money back fr tax.

Can his employer claim the tax overpayment back themselves, so that DP doesn't have to give his employer money he never technically received, or have we got to suck it up and put ourselves in the shit until the rebate comes through.

Just to be clear, his employers are specifically requesting the full overpayment back, including the tax and NI element.

Sorry for any mistakes in this post, I am a complete novice with any tax and NI issues, and am MNing from my iPhone at work! TIA for any help. :)

His employers are being rather unreasonable. You should be paying back the amount you have recieved not the gross amount. The employer can sort the
rest of it out if they want, they are just taking the easy way out.

Thank you for your reply.

Is that the legal position? I want to be sure if DP approaches his employer with the proposal to pay back only what he has received and not the tax, that we will be approaching them with some legal standing.

How did the overpayments occur?

It was a mistake on the part of DP's employer. I'm not sure exactly where the mistake occured, but he was paid at a level he shouldn't have been for three consecutive payments. We noticed the increase (obviously) and he informed the right people, but for some reason, the payment kept going at the increased rate for three consecutive occasions. DP did nothing to cause it.

If they pay gross through payroll and deduct overpayment as part of make up to gross, the tax position should correct itself each time he is paid....

Your tax works on the cumulative pay so a reduction in pay should mean less tax paid too....??

Ask them to give a proper breakdown of what happened and how they are proposing to take it back

They need to correct it in the same tax year or the tax on what he was paid / pays back will possibly be different if he crosses a threshold for higher rate tax

However, if it will cause hardship, it would not be unreasonable for them to recover in smaller amounts over a period of time.... Just a bit more complicated to calc the tax etc