Tax Refund through salary after changing jobs?

charlietheminxx

Hi, hoping someone can help me with this,

My previous employer underwent a merger in April and I was out of work from the end of April until I started a new job mid-June.

I got paid yesterday and it was a few hundred more than I was expecting. On my payslip, my net pay is higher than my gross pay. I spoke to the person who does payroll and they said that it looks like I had previously overpaid PAYE which had now been refunded to me.

Does this make sense? I haven't applied for any refunds etc.

I just don't want to spend the money and have a big clawback in next month's salary, but I could obviously use the cash and I am rather tempted.

gerrybbadd

Yes, this is how it works.

Basically, you were overcharged in the previous job. When you hand in the P45 to the next job, they have to make sure that the correct amount of tax is deducted to that tax week. So, if you have overpaid in previous weeks, or have accumulated unused tax credits, they have to give you a refund. Even if that tax was deducted in another job

Mrs OBumble

Agree with the previous poster: you had six weeks of un-used tax credits, that is what has made your pay situation this month.

You are lucky in that your new employer was prepared to bankroll revenue in this way - some companies will only pay you back overpaid tax up to your gross pay, and make you wait for subsequent pays for the rest.

toadfly

Mrs OBumble wrote: »

Agree with the previous poster: you had six weeks of un-used tax credits, that is what has made your pay situation this month.

You are lucky in that your new employer was prepared to bankroll revenue in this way - some companies will only pay you back overpaid tax up to your gross pay, and make you wait for subsequent pays for the rest.

Why would they do that? its yours money and as long as Revenue have confirmed the previous pay and tax on the P45 is correct, there is no issue and it should be refunded. They have no basis for keeping that money surely?

charlietheminxx

Thanks so much! You've put my mind at ease it's my birthday tomorrow so I'm happy to have a little more cash than I thought!

thesimpsons

toadfly wrote: »

Why would they do that? its yours money and as long as Revenue have confirmed the previous pay and tax on the P45 is correct, there is no issue and it should be refunded. They have no basis for keeping the money surely?

a company does not have to refund tax to an employee if it will adversly affect their cash flow ( ie if the company has budgeted that its weekly payroll will be 7,000e and due to a tax refund it jumps to 8,000e one week )

L1011

toadfly wrote: »

Why would they do that? its yours money and as long as Revenue have confirmed the previous pay and tax on the P45 is correct, there is no issue and it should be refunded. They have no basis for keeping that money surely?

Because its "your money" that Revenue have, not your new employer.

Yes, the employer will get that amount reduced from their next remittance to Revenue but that may not be for some time.