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Doctor Extra Pay - Marginal Rate

Extra pay in error caused loss of PA

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A potential client doctor was paid extra £9.5k in error in a month - total payment was £18.5k which inluded £9.5k paid in error-  meaning this extra payment pushed him into higher rate bracket. This meant loss of personal allownace. Pension contributions were £11k by him. When taking off pension contributions from his salary he is left with £6k which was charged at 60% marginal rate as it was  between £100k - £123k.

He paid back the overpayment in two instalments in next financail year.

Am i right in thinking that based on his margianl tax basis, he overpaid £3600 (6k X 60%)? or am i missing something?

Replies (3)

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By Marion Hayes
28th Aug 2018 16:45

When you say he paid back in two instalments how much did he actually pay and how - bank transfer, from gross pay, from net pay?

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Replying to Marion Hayes:
JC
By A_non
28th Aug 2018 16:51

Paid out of Gross pay - in two installments of
£4.5k each month,

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By Matrix
28th Aug 2018 21:31

Assuming he is just an employee and was paid through payroll and he wants to be put in the same position he should ask the employer to do one of the following:

- Reimburse the additional tax paid as a result of the loss of PA

- Resubmit the RTI treating the additional pay as a loan and issue revised P60

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