Q&As

What are the tax implications when an employer makes an unintentional overpayment of salary?

Copyright © 2025 LexisNexis

Published by a LexisNexis Tax expert

Published on: 27 February 2024

imgtext

The Pay As You Earn (PAYE) system is the means by which an employer makes certain statutory deductions from an employee’s income. For more information, see Practice Note: Scope of the PAYE system.

The PAYE system relies on an array of reporting requirements, forms and compliance. Employers are required to comply with a number of month-end PAYE compliance and reporting requirements, including deducting the correct amount of tax and reporting these amounts to HMRC. This covers income tax, National Insurance contributions (NICs), student loan deductions and other statutory payments.

This reporting is completed under the Real Time Information (RTI) system. The standard return required under RTI is the full payment submission (FPS). This should be submitted to HMRC on or before each payment is made to employees. These may therefore have to be made more than once per month if employees are on other payment cycles. The FPS contains details of both payments made in the year to date, and payments made in the current period. For more

Powered by Lexis+^®

Jurisdiction(s):

United Kingdom

Popular documents

Notional payments not made good—the section 222 charge

Notional payments not made good—the section 222 chargeThe income tax charges associated with employment-related securities and securities options typically arise upon acquisition of securities, or because an amount of employment income is deemed to arise upon a subsequent chargeable event, rather

Convertible securities—tax treatment

Convertible securities—tax treatmentThis Practice Note explains the income tax treatment of convertible securities. The definition of convertible securities is set out in Practice Note: Convertible securities—definition.The basic effect of the rules applying to convertible securities (or an interest

Priority between loss reliefs in loss making companies

Priority between loss reliefs in loss making companiesWhy does it matter?A company that is a member of a group and has incurred any of the types of losses available for surrender by way of group relief may, without any further rules, have more than one way in which to use the loss. There are a

If a beneficiary signs a deed of disclaimer of their share of an estate and the estate pays their legal

If a beneficiary signs a deed of disclaimer of their share of an estate and the estate pays their legal fees, will that count as a PET against their estate?A disclaimer is the refusal of a gift prior to acceptance. The refusal of the gift must take place before the beneficiary accepts any benefit