Can I claim back overpaid tax after being giving my maternity pay in a lump sum?

Many companies prefer to pay SMP as a lump sum as it is less administration for them and, correctly, they deduct tax and NI applicable at the time the payment is made.

But, in this case you can reclaim the overpaid tax & NI if as, in this case, the lump sum straddles two tax years. The way you do it depends on whether you fill in a tax return or not.

If you fill in a tax return :

You can apply to HMRC by letter to request an “in-year” adjustment . It is best to do this by letter sent RECORDED DELIVERY so you can follow it up as it may take a number of weeks to process.

On the letter state:

• The payslip where the lump sum payment was made.
• Expected earnings for 2021/22 .

If you do not fill in a tax return :

Fill in the Form R40. In my opinion this is a bizarre form, not really fit for this purpose and would still require you filling in an accompanying letter explaining it. In fact, if you fill this in before the 5th April the chances are that HMRC will invite you to fill in another form later to confirm that you have had no other income in the meantime.

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