I have a question about the tax refund on the last payroll of the tax year. AN employee worked for few months this tax year for a company, earned around £16555.24 and pay the tax of £1282.80. Their tax code is 1216M. Now he started to work for one of our clients and on the final payslip this month it shows a tax refund of £225.60. I was wondering how this will be sorted out on the employer side - the current employer will pay him out the regular amount plus this tax refund and then the employer will claim it back form HMRC? Or will the employer pay out the regular amount and the employee will get a cheque with the tax refund? Thank you
The employer pays them their salary gross of the tax refund, and subtracts the refund from their other PAYE/NI/Student loan payments to HMRC made each month. Their PAYE software P32 ought to show them the calculation of the net amount to pay HMRC. If the employer's other HMRC PAYE liabilities don't cover the refund then the employer needs to contact their tax office for a PAYE refund claim form. HMRC will already be able to see what has happened through RTI so it should go through on the nod. The employee doesn't have to do anything except enjoy their payment from the employer for the refund.
