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Paid twice in 1 accounting month

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    Paid twice in 1 accounting month

    Hi,

    I recently had to switch to an umbrella due to IR35.

    I got paid for the first time in the May tax month. I submitted my timesheet for June as normal and my agency sent the money to the umbrella before the 4th of June. This meant that the Umbrella processed the payment within the same tax month as the previous month's payments. I ended up paying way more tax than I should have.

    My questions are:

    1. If the client is set up as being paid monthly in the system wouldn't it make more sense to delay the payment until the next tax month?
    2. Even if there was nothing the umbrella could have done, isn't the tax allowance from tax month 1 supposed to carry over to tax month 2 if I never got paid in April?
    3. If I don't get paid during the June tax month and get paid in July next will I get the overpaid PAYE back?

    Thanks

    #2
    Originally posted by Mobix View Post
    Hi,

    I recently had to switch to an umbrella due to IR35.

    I got paid for the first time in the May tax month. I submitted my timesheet for June as normal and my agency sent the money to the umbrella before the 4th of June. This meant that the Umbrella processed the payment within the same tax month as the previous month's payments. I ended up paying way more tax than I should have.

    My questions are:

    1. If the client is set up as being paid monthly in the system wouldn't it make more sense to delay the payment until the next tax month?
    2. Even if there was nothing the umbrella could have done, isn't the tax allowance from tax month 1 supposed to carry over to tax month 2 if I never got paid in April?
    3. If I don't get paid during the June tax month and get paid in July next will I get the overpaid PAYE back?

    Thanks
    PAYE will sort itself out so peaks and troughs in income will be adjusted with a reduction/refund as necessary in the next pay cycle. However, you won't have the same with NI as its calculation method is different. It's a significant amount there is a site/form (I can't remember the URL off the top of my head) where you can request refund of an overpayment.

    So you're complaining that you've submitted your June timesheet before having worked any time in June and got paid for it almost immediately?

    Most umbrellas are geared up to pay as soon as they've received funds from the agency/client. So they will invoice as soon as you submit a timesheet and they will pay you as soon as they receive payment. If you don't want to be paid that quickly then you need to be strategic about when you submit your timesheets.

    Comment


      #3
      Sorry I don't think I explained it correctly. Back in May I got paid for April and now on the 4th of June I got paid for May. However, both of these payments were made in the same tax month - that's essentially my issue.

      Comment


        #4
        It all gets sorted out over time, as ladymuck said. Most likely through an adjusted tax code next year, but you can also get a refund.
        Down with racism. Long live miscegenation!

        Comment


          #5
          Check the tax code your umbrella company is using, if its a X code you will be on a non-cumulative basis anyway so each payment is treated irrespective of how much you have earnt in the tax year already.
          Originally posted by Stevie Wonder Boy
          I can't see any way to do it can you please advise?

          I want my account deleted and all of my information removed, I want to invoke my right to be forgotten.

          Comment


            #6
            Originally posted by NotAllThere View Post
            It all gets sorted out over time, as ladymuck said. Most likely through an adjusted tax code next year, but you can also get a refund.
            I get that but it feels like to make like I missed out on a lot of money now due to my agency's and umbrella's faults. They are both the tax experts not me. Both companies take money for my paycheck each months and they kind get this simple thing right or even warn the contractor in advance. It is always beneficial to have the money now rather than later. Any idea how I can get the refund straight away?

            Comment


              #7
              Originally posted by Mobix View Post

              I get that but it feels like to make like I missed out on a lot of money now due to my agency's and umbrella's faults. They are both the tax experts not me. Both companies take money for my paycheck each months and they kind get this simple thing right or even warn the contractor in advance. It is always beneficial to have the money now rather than later. Any idea how I can get the refund straight away?
              It's not a fault of the agency or umbrella. They are paying you according to the contract terms. You submit timesheets each month and they pay you each month. It's not up to them to manage your tax affairs.

              Assuming you are not on an emergency tax code (did you check that as SiMac suggested?) then you will get the PAYE element back in your next pay packet. If you're on emergency tax, then why have you not given the umbrella a P45? Do you have two jobs, or are on two payrolls? If so, then you'll have to wait to the end of the tax year as that's not the umbrella's fault, no matter how much you think you're being treated unfairly.

              A nanosecond search on google for the term "reclaim overpaid NI" brings up this result, which will tell you more about how to claim the probably insignificant amount of NI you've overpaid: https://www.gov.uk/claim-national-insurance-refund

              Last edited by ladymuck; 7 June 2021, 12:21.

              Comment


                #8
                I just checked and my tax code ends with W1M1.

                According the gov website it's
                If your employee’s tax code has ‘W1’ or ‘M1’ at the end


                W1 (week 1) and M1 (month 1) are emergency tax codes and appear at the end of an employee’s tax code, for example ‘577L W1’ or ‘577L M1’. Calculate your employee’s tax only on what they are paid in the current pay period, not the whole year.

                Any idea what I can do to get the money back ASAP? I'm applying for a mortgage and the lender wants to see payslips.

                Same umbrella screwed up my first payments by processing my monthly payment as if it was just 1 week.

                Comment


                  #9
                  Originally posted by Mobix View Post
                  I just checked and my tax code ends with W1M1.

                  According the gov website it's
                  If your employee’s tax code has ‘W1’ or ‘M1’ at the end


                  W1 (week 1) and M1 (month 1) are emergency tax codes and appear at the end of an employee’s tax code, for example ‘577L W1’ or ‘577L M1’. Calculate your employee’s tax only on what they are paid in the current pay period, not the whole year.

                  Any idea what I can do to get the money back ASAP? I'm applying for a mortgage and the lender wants to see payslips.

                  Same umbrella screwed up my first payments by processing my monthly payment as if it was just 1 week.
                  There isn't, any overpayment in tax will be sorted out at the year end (although odds are there will not be an over payment as SA etc will mean you will just owe them less if you've paid yourself any dividends), move on there is no point trying to pursue this as the agency won't help as they have paid you want HMRC has told them to based on the information they have at the time of the RTI.

                  Let me repeat that, there is no money due back to you as no error has been made, you have been paid twice within a month, that is bad luck not anyones fault.
                  Last edited by SimonMac; 7 June 2021, 12:45.
                  Originally posted by Stevie Wonder Boy
                  I can't see any way to do it can you please advise?

                  I want my account deleted and all of my information removed, I want to invoke my right to be forgotten.

                  Comment


                    #10
                    Originally posted by Mobix View Post
                    I just checked and my tax code ends with W1M1.

                    According the gov website it's
                    If your employee’s tax code has ‘W1’ or ‘M1’ at the end


                    W1 (week 1) and M1 (month 1) are emergency tax codes and appear at the end of an employee’s tax code, for example ‘577L W1’ or ‘577L M1’. Calculate your employee’s tax only on what they are paid in the current pay period, not the whole year.

                    Any idea what I can do to get the money back ASAP? I'm applying for a mortgage and the lender wants to see payslips.

                    Same umbrella screwed up my first payments by processing my monthly payment as if it was just 1 week.
                    Nothing has been screwed up. The tax code tells your umbrella what to do.

                    Now, what are YOU going to do to get your tax code sorted? It's your responsibility so I suggest you fix it. Where is the P45 from your previous employment? Why haven't you provided it to the umbrella yet?

                    The mortgage company don't care what your tax code is, they just want to see payslips that match the level of income you've said you earn.

                    Comment

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