Former Employer Still Owes Money But Has Issued P45

[mrpoorman]

My employment contract with my former employer says that they do not have to pay me any commissions and bonuses after I leave of if they are payable during my notice period. As I was leaving to go to a local competitor, the standard (unofficial) policy would be to let me go without working notice, however due to the time of year (March - I work for car dealership) they said that they wanted me to work the notice period but that they would pay me for my outstanding deals. I agreed with the General Sales Manager how and when this would be paid and I went on to work the notice period as required. At the end of March they paid me as agreed however the commission for March was still outstanding and due to be paid at the end of April but I have now recieved a P45 from them. I assume this means that they wont be paying me anything at the end of April?

If so, what can I do?

[Phaeton]

Have you asked them what their intentions are?

[mrpoorman]

I have emailed and am awaiting a response

[ULA]

Did you get confirmation in writing to the agreement to pay outstanding deals if you worked your notice? I just ask since the wording you have posted up from your contract implies that they do not have to pay any commission or bonus if they are payable in your notice period. I presume the commission and bonus you were looking to be paid for were any deals you made in your notice period?

I suggest that you write to the company requesting the outstanding payments and assuming you have a written agreement to pay these sums refer to that document.

The company can still pay you the outstanding commission even though you have been issued with a P45, however they will not be able to issue you with a new P45.

[mrpoorman]

They have replied since I made the original post. Sales Manager says it will be paid at the end of this month.

I confirmed our agreement by email to him which he then forwarded to payroll and copied me in. I forwarded this email chain to my personal email so I had a record of it.

There was confusion originally with my leaving date as they asked me to cover March 1st but then March 2nd would be the last day I was required in work but would be paid for a further 3 weeks (giving 4 weeks notice total) and then the commission agreement was in addition to this. On March 2nd the Dealer Principal decided that I had to work the full notice period as they were paying me for it. The confusion centred around a car I had on an employee benefit scheme, they emailed to get it back by March 2nd and I said I was still an employee until March 23rd so thats when they could have it back.

[ULA]

So it sounds like everything has been resolved. That's good news.

[mrpoorman]

Hopefully. Will they deduct tax and NI from it or will I have to sort that myself?

[ULA]

They should make the necessary tax and NI deductions.

[ostell]

But they have already issued a P45 so that is now incorrect and the new employer is working with incorrect figures.. Make sure that all the documentation is kept for the end of the tax year.

[ULA]

Company payrolls are currently run on a Real Time Information (RTI) basis whereby as soon as a company runs a payroll the information is automatically sent to HMRC. They will pick up the additional commission/bonus payments being made and if there is a consequential effect on your tax code/payments based on the information your new employed had from your P45, HMRC will notify your new employer and you and any changes will be effective from your new company's next payroll run. This will minimise any consequential overpayment/underpayment for you.

A benefit of RTI is that situations like these can be picked up relatively quickly with any adjustments being made at the time rather than it being picked up at the end of a tax year where incorrect information may have been applied throughout the tax year.

[ostell]

Thanks ULA looks like there's been some changes made since the last time I had to do a payroll.