PAYE72057 - PAYE operation: payments for PAYE purposes: accidents: gross advance refunded (Action Guide)

If you receive a tax repayment claim from an employee or an enquiry by an employer where an advance of pay has been paid to the employee involved in an accident and the gross advance has been refunded by that employee to the employer, follow steps 1 - 5 below. The guide is presented as follows

Refund of gross advance made in the same tax year as advance

1. You should tell the employer to

• Exclude the gross amount of the advance from the employee’s next weekly or monthly payment at column 2 on the Deductions Working Sheet
• Make any repayment, as a consequence of this, on the employee’s next pay day

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Refund of gross advance made in a tax year after the year of advance

2. No repayment of tax is made by the employer to the employee
3. The employee is repaid the tax from HMRC by including in their SA return

• The total pay figure as shown on form P60, less the gross amount of the advance
• The figure for tax deducted as shown on form P60

If the employee has already submitted a return then invite them to make an error or mistake claim under Section 33 TMA 1970. Further guidance on this is given in the SA Manual in ‘Claims made outside a return’ at SAM114000 onwards.

4. Taxpayers not in SA should submit a copy of their P60 with an explanation why they are requesting a repayment of tax
5. You should verify any claims under 3 and 4 by confirming the revised Pay figure with the employer. For further guidance on repayments see PAYE91000 onwards