Redundancy Payments Office NI over deducted deducted

Redundancy Payments Office NI over deducted...

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Hi All,

I have a client who was made redundant and received a payment from the Redundancy Payments Office.

Tax and National Insurance has been deducted from the unpaid wages and holiday pay, but due to his circumstances both the NI and Tax deducted are too high.
The letter and notes from RPO say that both can be reclaimed if they have been over deducted.

The tax is obvious, and can and will be done via the tax return as normal, but my complication is the NI, which I have never experienced in this way.

How do you go about reclaiming the NI?
How is the calculation done? Is it based on the annual NI threshold?
And anything else I need to know.

Out of interest, if a Director receives a payment from the RPO (which I know is rare), can their NI calculation be based on them paying NI on the annual calculation method.

Any information you could provide would be very gratefully received. Thank you in advance.

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By David Heaton
16th Mar 2015 15:02

Use a weekly earnings period

The guidance for RPO late pay is on page 77 of the CWG2 (2015).  You normally use a weekly earnings period and Table A.  For former directors, the rules are in Regulation 8 of the Contributions Regs 2001: you must only use an annual period. If the RPO pays out in the year of cessation, the original AEP applies.  If it's in a later year, don't aggregate with any other earnings and use an AEP.

Write to NIC&EO Refunds in Longbenton to reclaim overpayments.

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