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Can employer claim a tax refund to offset holidays owed?

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  • Can employer claim a tax refund to offset holidays owed?

    I have just received my final payslip from my previous employer and it seems they have refunded £260 from my income tax on my final wage of £75 to off set holidays taken above my entitlements.

    My total gross earnings up to and including this month is £9765.

    I worked out that I have paid around £840 tax so far this year however my cumulative tax paid shows as £580.

    I shouldn't have paid any tax on my final salary of £75, but there is -£260 in the deductions column.

    Are they allowed to use my income tax to claim back holidays? Will this not lead to an underpayment to HMRC once I start a new job?

    Thanks in advance for your advice.


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  • #2
    HAs your employer said that they are adjusting your final wage tax and holiday pay wise?
    What holiday pay were you owed ?
    How did you final salary payment work out at £75 ? Did you only work a couple days over the previous month end ?

    You could check https://www.gov.uk/check-income-tax-current-year

    You earn around £1395 a month before tax/NI ? ( about £16.5k per annum )

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    • #3
      Hi sorry yes I should of mentioned. I left on the 01/10/18 and was only paid for that day in this pay period.

      My annual salary is £20500.

      Comment


      • #4
        Before any pension deductions etc. My employer didn't expressly tell me that they were taking the holiday back I'd assumed I would get a letter about it as I had to leave quite suddenly.

        Sorry it posted before I finished.

        Here is the payslip. I used rounded figures above.

        Attached Files

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        • #5
          Have you got previous months payslip for comparison. Might assist.

          Tagging Ula for you.
          “We may not win by protesting, but if we don’t protest we will lose. If we stand up to them, there is always a chance we will win.” Hetty Bower

          Any support I provide is offered without liability, if you are unsure please seek professional legal guidance.

          Received a Court Claim? Read >>>>> First Steps

          If we have helped you we'd appreciate it if you can leave a review on our Trust Pilot page

          Find Solicitors offering fixed fees on our sister site - JustBeagle.com

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          • #6
            Sorry I don't. They were electronic to work intranet.

            The minus in deductions means I have recieved a tax rebate in this months wage. I can't understand why they have done that this month.

            When I get paid from the new job I'm going to owe that tax to HMRC as spread over the year I will have underpaid.

            If you look at the cumulative figure I have paid more Ni than tax.

            I'm assuming HMRC haven't decided to give it to me off their own backs, I dont understand why they would since I definitely haven't overpaid.

            Comment


            • #7
              By the looks of the calculation you overtook holiday by 4.5 days. Do you agree with this? However the deduction could only be made if there was provision in your contract to do so. So you should check this.

              Your employer will not have given you a tax refund to cover the cost of the deduction for overtaken holiday. I suspect that your company's payroll system would have recalculated your tax paid to date against your salary to date which would take into account only getting £75 for the last month and you will have overpaid tax hence the refund. You can always give them a call to confirm this is the case.
              I do my best to provide good practical advice, however I do so without liability.
              If you have any doubts then do please seek professional legal advice.


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