Overpaid N.I - because of late addition to payroll

[OUB1974]

Hi. I started work last year, but for some reason I don't seem to have been added straight away to the payroll. I was given an advance while it was sorted out, then paid three months salary in one go, with the advance deducted.

This has meant I paid far too much tax and N.I because I had a monthly tax code so only got one month's worth of allowance even though it was for three month's wages.

The tax will sort itself out when my P60 is issued. However, I'm not sure what will happen with the N.I. can you claim a refund or does it happen automatically like for tax? As this is a couple of hundred pounds I'm quite worried.

Ideally you need to get your employer to adjust the prior month's payroll, adding you in as you should have been and resubmit amended figures to HMRC.

NI isn't cumulative (apart from directors) and so of they won't do this you can't get the money back.

www.gov.uk/claim-national-insurance-refund

Your payroll department should amend this for you and resubmit files sent to HMRC.

@OUB1974

Hi. I started work last year, but for some reason I don't seem to have been added straight away to the payroll. I was given an advance while it was sorted out, then paid three months salary in one go, with the advance deducted.

This has meant I paid far too much tax and N.I because I had a monthly tax code so only got one month's worth of allowance even though it was for three month's wages.

The tax will sort itself out when my P60 is issued. However, I'm not sure what will happen with the N.I. can you claim a refund or does it happen automatically like for tax? As this is a couple of hundred pounds I'm quite worried.

Your income tax should have corrected itself in the next payroll, so long as your tax code is correct it shouldn’t need the year end to right itself. But p, if for whatever reason your tax code was not corrected, then yes this will happen automatically.

NI is different, there are no automatic refunds. Also as it is a non cumulative tax, I am not convinced you would get this back at all.

Are you sure you overpaid though? Over a certain level NI is paid at 2% rather than 12% which will balance out losing out two months of the NI free amount. I calculate that anyone on average earnings and above would pay less NI if they got three months salary at once. On the other hand somebody on say £13k pa would pay £189 more NI if they got three months salary at once.

Thank you for the replies. Yes I earn a little more than £13k @Aprilx so it's meant quite a shortfall in both tax and NI this month, which was bit of a shock! We have had to dig into our very small savings this month. But if it's possible for payroll to tell hmrc that this has happened and correct it, then surely they will do this?