Erroneously got paid via PAYE - how to reverse?

[dowjones123]

I was discussing a possible employment in a limited company in early February, however we didn't conclude the discussion and I didn't work for this company.

Now, it seems that the company has gone ahead and erroneously put me in their PAYE scheme, and been paying me for the last few months and deducting Income Tax, NI etc and paying it to HMRC. This was all in error and I have met up with the director and recently realized this mistake (i spotted it first by checking my bank account)

The company naturally wants me to refund the amount it paid erroneously as salary (and I am happy to do so as it was a genuine mistake and I am on good terms with the director), however, I do not want my Taxable income for the year to be increased because of this mistake (as I am earning from another job as well). Given this, the best way should be to tell HMRC about this mistake and clean the books entirely - return it to a state where I was never paid, and no Income Taxes, NI are due on behalf of me to HMRC.

What is the best way to do it? Should I call up HMRC and explain this clearly? Thanks

[WTFH]

I was discussing a possible employment in a limited company in early February, however we didn't conclude the discussion and I didn't work for this company.

Now, it seems that the company has gone ahead and erroneously put me in their PAYE scheme, and been paying me for the last few months and deducting Income Tax, NI etc and paying it to HMRC. This was all in error and I have met up with the director and recently realized this mistake (i spotted it first by checking my bank account)

The company naturally wants me to refund the amount it paid erroneously as salary (and I am happy to do so as it was a genuine mistake and I am on good terms with the director), however, I do not want my Taxable income for the year to be increased because of this mistake (as I am earning from another job as well). Given this, the best way should be to tell HMRC about this mistake and clean the books entirely - return it to a state where I was never paid, and no Income Taxes, NI are due on behalf of me to HMRC.

What is the best way to do it? Should I call up HMRC and explain this clearly? Thanks

I'd give your accountant a call and take advice from them

[Fred Bloggs]

Fill in a tax return at year end, all will be sorted out.

[dowjones123]

I'd give your accountant a call and take advice from them

Thanks, I don't have an accountant at the present moment and I was thinking that I should not require one as this is not an error on my part to correct.

[GB9]

Fill in a tax return at year end, all will be sorted out.

WHS

Being reasonable with HMRC will, in their eyes, confirm guilt. It matters not of what you are guilty, it's just a matter of time for them to find something.

[dowjones123]

Fill in a tax return at year end, all will be sorted out.

Thanks Fred - so should my next steps be
1. Return the post-tax salary that was paid to my bank account to the company
2. Get some sort of documentation from them that I have refunded this to them and this was a mistake
3. Get some documentation from them saying that they have cancelled the PAYE and that that they confirm that I don't owe any NI and Income tax to HMRC on the basis of this (mistaken) employment
4. They get back the tax, NI they paid to HMRC now itself?
5. I file all these documents at end of tax year? For me there is no cash transfer to HMRC - just I refund the company, the company asks HMRC for getting PAYE, NI etc back, correct?

[WTFH]

Thanks, I don't have an accountant at the present moment

Ah, most people on here are contractors and we would have accountants to do our tax returns and work out the correct/best way of dealing with finances.

[dowjones123]

WHS

Being reasonable with HMRC will, in their eyes, confirm guilt. It matters not of what you are guilty, it's just a matter of time for them to find something.

I didn't get this fully - so its best not to wait till tax year end then?

[stek]

Suggest everyone looks at the previous posts the OP has started....

[NotAllThere]

Suggest everyone looks at the previous posts the OP has started....

Any particular ones?