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Salary Arrears after leaving employment - Follow up

Salary Arrears after leaving employment -...

I previously posted a question about receiving salary arrears after leaving employment and how my ex employer should treat it.  The general consensus from the responses I got was that my ex employer should process the payment through their payroll using a 0T code.  I informed my ex employer of the way they should do it, but yesterday I received an email saying the payment will be made gross and I have to account for my own tax.  I am going to refer them HMRC guidance and legislation detailing what they should have done but if they don't back down what is my next course of action?


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By neileg
23rd Feb 2012 16:48

I wouldn't worry

If you complete a self assessment return you'll have a balance of tax to pay. Pay that and you'll be all square with HMRC.

The consequences of getting it wrong fall on the employer, not the employee. In theory, HMRC could treat your cash payment as net of tax and ask your ex-employer for the tax they should have deducted.

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By qubmatt
to Joe Soap
23rd Feb 2012 16:55

Thanks for the response....

I don't complete a SA return and don't want to start. hence my concern. 

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24th Feb 2012 16:41

Notify HMRC

If you recieve any untaxed income, you have a legal obligation to notify HMRC in order to have it taxed. However it would not be unreasonable for HMRC to then chase the employer for incorrect operation of PAYE, as there would probably be a national insurance liability as well as tax due.

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