One of my clients had two employees this month who were due a large tax refund, one of £922 and the other of £200 odd. Has anyone had experience of applying to HMRC for funding for tax refunds? I've come across this link :-
The only funding issues I have come accross with HMRC is where a company has received SMP funding from them. So instead of deducting the SMP from the PAYE payments when it was paid to the employee each month the company had received it in advance. I am not sure that you can obtain funding for this type of payment. As your client has had to pay these amounts to their employees obviously they will be deducting these amounts from the company's PAYE payments to HMRC, so they will get their money back in the end even if it has to take more than one month and if it kleads tgo an overpayment by the company at the end of the tax year this can be carried forward to 2011/12.
Many thanks for your replies. OK, so both of you are saying different things I understand that as the client has paid the refunds to the employees that her PAYE payments to HMRC will be less as a result, so was wondering how the funding worked.
Julie, what exactly do you mean when you say "if the refund is more than they would collect"?
Not wishing to speak for Julie but say the monthly payment to HMRC of PAYE and NIC is 600 and you have paid a tax refund to an employee of more than this say 700, then you wouldn't pay any tax and NI over that month send in a "payment not due" return (else you could be fined for failing to send in a return). Then claim the 100 from the following month's payment. If the difference was a huge one you could request additional funding to cover this.
I understand that as the client has paid the refunds to the employees that her PAYE payments to HMRC will be less as a result, so was wondering how the funding worked.
