Being overpaid for 8 months, how to repay

[noraB3]

Hi all, Whats the best option for me (taxwise) as my work paid my salary according to a 5 days weekly as opposed to 4 days weekly. When I noticed it, it was 3 months into the job and now the organisation still hasnt cleared it up. Slow to correct.
Should I opposed paying it til next year or how will I loose out ?
Obviously I have to pay it back but I want to know the best option so I do not pay more tax than I needed too. I've already paid tax on it the last 8 months now I will have to pay it back over a 8 month period.

Any advice would be gratefully appreciated
Noreen

 

[Joe_90]

It really depends on whether you end up paying a different rate of tax. So if you are at 40% in the current year and end up at 20% next year then it not going to work in your favour.

 

[mathepac]

Unfortunately the only way to correct this overpayment is have a TAXABLE adjustment made to your pay each week/month equivalent to the overpayment you received.

This TAXABLE adjustment will reduce your GROSS pay before calculation of taxes etc and repay the overpayment. Any arrangement to make deductions from your NET pay will see you overpaying tax.

Ideally, the repayments should be made in the same tax year but as your payroll department sounds like a bit of a nightmare this may not happen. Check that all your tax credits are correct before the repayment process starts. If the repayments cannot happen in the same tax-year as the overpayments, than perhaps in a single tax year, unless that will cause you undue hardship.

As @Joe_90 said, there is no ideal way to handle this unfortunate situation.

 

[Bronte]

They made the mistake and you should do a calculation that is best for you. The company should then pay for the difference if there is any. You should also have to repay at a time of your choosing, ie from January seems to be what you want, and I'd agree, because this time of year can be expensive.