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Years ago when I was a self employed stubby, I was deducted the 20% CIS payment. I informed them they had deducted it in error so they refunded me the 80%. I shut up and took it. There were other folk on my team who were gash getting paid the same as me.
Nowadays every year I get letters from HMRC stating I've either paid too much or too little tax depending on the overtime worked.
Sorry but if your company find out you will be on the hook for it, in my experience. My company will usually look to recoup the money over a 6-12 month period (depending on the amount) but the amount being deducted cannot leave them under minimum wage so the 12 months are extended in that situation. If you leave they take it off your final salary then recoup any remaining and if the colleague refuses to pay/engage at all then it is passed over to a debt collection company. They will always work with the colleague around payment terms as best as they can to avoid that situation though.
your situation sounds a bit extreme though (a few months etc is the biggest I have heard of) if you, sorry your colleague has been 20% overpaid for 3 years I think it would be be reasonable for your employer to write if some of the debt due to length of time, but that means alerting them, explaining how it has just come to light etc and seeing what the want to do.
the longer it goes on though the bigger the hole you/they will be in. You/they could resign and hope they don’t realise.
your situation sounds a bit extreme though (a few months etc is the biggest I have heard of) if you, sorry your colleague has been 20% overpaid for 3 years I think it would be be reasonable for your employer to write if some of the debt due to length of time, but that means alerting them, explaining how it has just come to light etc and seeing what the want to do.
I'd say it highlights some serious failings at the company in question.
Over three YEARS, no-one has bothered to check salary grades, tax codes, pension contributions and do a general payroll audit? What about salary increases during that time? I'm assuming even if the employee didn't move up any grades they should at least have got cost-of-living increases which should in itself have triggered a pay grade audit (if nothing else to work out any employees moving from basic rate to higher rate tax band)?
I wouldn't be surprised to find someone in Finance / HR on the take, skimming a bit off somewhere along the line and any discrepancies that are highlighted re the pay of any other employee suddenly leaves that person in Finance open to criminal proceedings. Hence why, miraculously, no-one has noticed or said anything...
Not that I'm cynical you understand. 😉
Wow crazy-legs that’s quite a world you live in! I’m not sure why you think a manual audit is needed to check for people moving tax bands - I doubt anyone is running payroll calculations by hand, the software does all this stuff for you. It’s fairly easy to miskey a number and suddenly some is getting 35000 instead of 30500 pa! When I I was in bigger companies I’d get an annual report with the salaries and proposed changes as part of the salary review process, but as it wasn’t always obvious what salary people would be on - the concept of “grades” is the sort of thing you find in unionised workplaces. From a spreadsheet there is no way to know if Mr X should be on 30500 or 35000 and if other people in that department east 30-40k it wouldn’t stand out as an anomaly.
FWIW for the OP - HR will say it must be repaid. I had an issue with an employee who returned from Maternity leave, went down from 4 to 3 days and company kept paying her 4 days. That was probably hard to spot the first couple of months as tax/mat pay stuff would all be changing - but she “should” have noticed it a few months in. Came to light after a year and HR were as unhelpful as you would expect. The payroll admin was similarly “must be repaid”, “their responsibility to highlight errors”, etc. I had a cup of coffee with the finance director and pointed out she was very hard working, a valued employee and that if we treat her shit for their error she would be time consuming and expensive to replace. He made the problem go away but HR and Payroll were furious.
your payroll department and HMRC sort it out by adjusting your PAYE deductions. Or you do a self assessment at the end of the year and get any overpaid tax back
Except she left shortly afterwards & have you tried to get HMRC to do anything recently, especially when it requires ex employer to also tell them about now non existent over payment.
Wow crazy-legs that’s quite a world you live in! I’m not sure why you think a manual audit is needed to check for people moving tax bands - I doubt anyone is running payroll calculations by hand, the software does all this stuff for you. It’s fairly easy to miskey a number and suddenly some is getting 35000 instead of 30500 pa!
That’s why you have budget holders who should notice that their payroll costs have suddenly jumped up. Or that payroll is suddenly costing significantly more than it should. It is pretty much the only job of payroll to pay staff correctly.
your payroll department and HMRC sort it out by adjusting your PAYE deductions. Or you do a self assessment at the end of the year and get any overpaid tax back
Except she left shortly afterwards & have you tried to get HMRC to do anything recently, especially when it requires ex employer to also tell them about now non existent over payment.
It would be on your P60 at the end of the year (or your P45 on leaving if before year end). You fill in your tax return (anyone can opt to do one) and would sort it out at year end.
Over three YEARS, no-one has bothered to check salary grades, tax codes, pension contributions and do a general payroll audit? What about salary increases during that time? I'm assuming even if the employee didn't move up any grades they should at least have got cost-of-living increases which should in itself have triggered a pay grade audit (if nothing else to work out any employees moving from basic rate to higher rate tax band)?
I wouldn't be surprised to find someone in Finance / HR on the take, skimming a bit off somewhere along the line and any discrepancies that are highlighted re the pay of any other employee suddenly leaves that person in Finance open to criminal proceedings. Hence why, miraculously, no-one has noticed or said anything...
Really? The reality in a large corporate is that your team is often made up of people on quite widely varying salaries for very similar jobs. There might be a salary band that they're supposed to be paid within but that usually mainly applies to internal promotions. If it's someone recruited from outside they will have been paid 'market rate' probably based on what they were on elsewhere (and it might have been necessary to pay above the top of the band to get anyone. Some people will have moved internally and might have been paid more in another role for unknown reasons (they might have been redeployed to a lower grade job as part of a reorg, but salaries are almost never dropped, usually just frozen until they're back in band).
If you've got a team of any size there are almost always vacancies so one person being paid more than they should have been won't take you over.
Sorry but if your company find out you will be on the hook for it, in my experience. My company will usually look to recoup the money over a 6-12 month period (depending on the amount) but the amount being deducted cannot leave them under minimum wage so the 12 months are extended in that situation. If you leave they take it off your final salary then recoup any remaining and if the colleague refuses to pay/engage at all then it is passed over to a debt collection company. They will always work with the colleague around payment terms as best as they can to avoid that situation though.
Blimey, this makes it seem like a pretty regular occurrence at your work @andy4d! How often does all this go on?
would sort it out at year end
😆
This is HRMC. It can take years to get sorted. Well it did when I overpaid NI. I didn't even chase it. They started a process of paying it back to me, then them insisting I pay it back with interest and fines, them them paying it back again, then asking for it back again... when the merry go round finally stopped I was out of pocket (but didn't want to do anything about it because I just wanted it to stop). Then it turns out that I didn't get credited with NI years for the period I overpaid for. Fun.
Way too often, costs the company a fair wedge every year. Whole new payroll system/provider introduced early this year to help reduce errors. Old system relied too heavily on manual input new one is all electronic with clocking in etc.
Wow crazy-legs that’s quite a world you live in! I’m not sure why you think a manual audit is needed to check for people moving tax bands - I doubt anyone is running payroll calculations by hand, the software does all this stuff for you. It’s fairly easy to miskey a number and suddenly some is getting 35000 instead of 30500 pa!
That’s why you have budget holders who should notice that their payroll costs have suddenly jumped up. Or that payroll is suddenly costing significantly more than it should. It is pretty much the only job of payroll to pay staff correctly.
If your payroll costs were the same every month you might notice a significant change, but in that example its £375/month different - if you have ~20 staff it's a <1% variance, and if you have people joining / leaving / being promoted / working overtime / paid differentyl for being sick/overtime etc. there is no way you will spot that unless you have nothing to do except trawl for errors.