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Tax refund for employee with nil pay for a period

Tax refund for employee with nil pay for a period

Employer Further Guide to PAYE and NICs CWG (2012) page 14 states:

Paying a refund of tax when no payments are due to your employee
If an employee on a cumulative code is due a refund of tax but is not entitled to receive any payment from you in a pay period because:
• they are absent on unpaid leave, or
• they have no further entitlement to SSP, SMP, OSPP, ASPP or SAP, and
• they are not absent as the result of a trade dispute
you must operate PAYE or run your payroll as if making a nil payment as long as the employee or their authorised representative has asked you to do so.

which indicates that although you may normally put them on hold (Sage payroll suggests you do this), if the employee requests, you must process and pay the tax refund? That's how I interpret the last sentence.

We have casual staff who may work one week but not the next, so I suppose they fall within the 'absent on unpaid leave' category.


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09th May 2012 10:46

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I have no difficulty in returning overpaid tax to employees. It's not the employer's tax.


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