Work Query

B

blackwood_villa

Vital Squad Member
I need some assistance if anyone can help...

In December my company paid me a 5k retention bonus, repayable if I leave within a year. Subsequently I am now leaving and they wish for me to repay the gross value whereas I think, as it is within the same tax year, I can repay the net. The contract states only the full amount, not gross or net.

I have had conflicting advice. A member of the board of directors at the CIPP thinks I should be able to repay the net amount whereas HMRC think I should repay the gross. My main concern with this is that if I repay the gross amount, I would want this reduction reflected in my P60 so that the HMRC can issue a quick rebate (in accordance to what the lady told me) whereas my company want to issue me a letter for me the claim to tax back via self-assessment, which will take forever.

Any advice/guidance will be gratefully received.
 
Did you receive the £5,000 net or gross, blackwood?

You should basically return it the way you got it, so normally this would be through your salary.
 
I would guess that if the 5k retention bonus was paid to you nett, then even if you pay the amount back gross, it should reflect in your gross pay to date being reduced, then a tax refund would be made.

Regarding any NI contributions, then I can't add anything.
 
I was paid the 5k gross so it was subject to tax/ni. My company have now said that I should repay the gross amount and this will not be reflected in the payroll (because it wasn't a payment made in error) and they will give me a form to submit to HMRC to reclaim it back via self assessment.
 
The problem is tat PAYE doesn't really handle negatives on a monthly basis, which is probably why they want you to sort it out yourself. It's near the end of the tax year, so that's not too bad. HMRC can be reasonably quick if you get all the forms in quickly.

I would say you're stuck with what they offer, as they are probably limited by the payroll system they use, and I bet you it can't handle it.
 
Yeah im going to take the hit on repaying the 5k back and then reclaim it. HMRC said it can take up to 4 weeks for the rebate which isn't bad at all.
 
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