Advice required

[Reni234]

HI

An ex employer overpaid me approx 3months salary after I left, I didn’t realise until I received a letter from them, they advised they had not processed my resignation correctly.
The payments went against an overdraft so I was unable to repay the funds in full but agreed a payment plan.
i advised my current work status was temporary so would review regularly to increase payments where possible.

After a year of sticking to this payment plan they have now sent a letter before action demanding full payment
They have used my LinkedIn account to ascertain my employment however my LinkedIn account did not reflect my employment contract status (I had short term extensions and was on a fixed term contract) also I was on sick leave for 9 months due to injury. Despite this I continued payments against the payment plan to repay the debt.

i have lost income from tax credits and am paying additional income tax (as HMRC see this as income despite it being repaid as the ex employer has reported my earning including this overpayment and have refused my p45 until payment has been made).

i have no clarity on any holidays due and they have not responded to this, I do not dispute paying this back but is there anything I can do as this sudden demand for the full amount seems unreasonable considering I have been keeping to the payment plan agreed. I do not have any option to make this repayment in full and actually I am sure my financial status would show I am already paying back more than I can afford, but I am keen to clear this up as it is a debt and is affecting my income due to tax.

Any advice would be greatly appreciated

[efpom]

If I understand correctly, your former employer overpaid you, on leaving that employment. That mistake by the employer, was not brought to your attention promptly. Meantime, you spent that money believing the money was yours.

When the mistake was discovered, you explained that the money had been spent and entered into an agreement with your former employer, to repay the money in installments.

One term of that agreement was that if your financial situation improved you would increase the amount of the installments.

You have kept your side of that agreement. However, the other party to that agreement - your former employer, has issued a letter before claim, indicating that it intends to take legal proceedings, presumably aimed at obtaining an order from the court that you pay the remainder of the outstanding debt immediately.

It seems to me, without sight of the letter of claim, which I suggest you post up, that the only basis on which the claimant-your former employer, could succeed in court, would be on the proposition that you have breached the agreement, by failing to increase the amount of each installment, when you are now well placed financially to do so.

It is for the claimant to prove that there was such a breach, that the breach amounted to a repudiatory breach by you of the agreement, that it accepted that repudiation, and that it is therefore entitled to sue for payment of the remainder of the debt immediately.

[2222]

In the meantime, contact HMRC to get the tax situation sorted. It's clearly wrong that the company reported the overpayments as pay at the same time as demanding them back. They are not entitled to withhold your P45. They have behaved appallingly from that point of view, and you should ask HMRC for help.

It's a shame that you agreed the repayment plan, as there was an argument that you didn't have to pay anything! Anyway, that's water under the bridge.