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RJM Law
RJM Law, Laywer
Category: Employment Law
Satisfied Customers: 3778
Experience:  LL.B (Hons)
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I have a question. I am about to leave my current employer

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Hello there, I have a question. I am about to leave my current employer within 1 year of my start date. Contract states that I should be paying back the bonus if I leave the employer within 1 year of my start date. I got last month a sign-on bonus (gross £20K, net £11K), and I want to understand the clawback options for the employer. Should I pay the gross amount back, even if I received roughly half of it? I was also reading that I can then "claim" the negative income later during my tax declaration process. Thanks!
JA: Are you hourly or salaried? How many hours do you work each week?
Customer: 37.5h per week / salaried
JA: Have you talked to a lawyer about the wage issue?
Customer: No
JA: Is there anything else the Lawyer should know before I connect you? Rest assured that they'll be able to help you.
Customer: No, don't think so. What would be the costs of the service?
Customer: replied 12 days ago.
Just to be clear, I am referring to a sign on bonus. I am reading few articles/cases on Google however cannot really understand what's the rule here in the UK. Thank you!

Hello, and thank you for choosing our service today.   I am the expert who shall assist you with this matter today.

Please note that our service is conducted through emails and from time to time there may be a delay between answers and responses, this is due to the expert availability at the time.  If you do not receive a response immediately, please be advised you will receive one by the end of the day

I will be able to provide you with guidance in relation to your question.  However please note this does not form a professional client relationship and we cannot provide representation, however, I would be hopeful that my guidance will be able to assist you.

Thank you

Customer: replied 12 days ago.
Thank you very much, all clear!

Thank you, ***** ***** will require to pay back the full amount of the bonus (you don't have to do this in one go).  However you can, as you have rightly stated, claw back the tax on this.  As you are not required to make the tax payment due to the requirement to pay back, therefore it cannot be classed as income.  When this happens you can contact the HMRC and ask for a tax rebate, you don't require to wait until te annual allocation.

Hopefully, I have answered your query in a way that is simple and easy to understand. If anything remains unclear, I will be more than happy to clarify it for you. In the meantime, thank you once again for using our services.

Should you require any further assistance on this matter, please do not hesitate to post a further questions for additional assistance.

Kindest Regards.

Customer: replied 12 days ago.
Ok, very clear, thanks!So basically, if I understood you well: once I repay I can contact the HRMC and ask for a tax rebate right away. Is the tax rebate a straightforward process to get the money back or is it a complex deal? It can be done online/is there any specific guide available on internet? Thank you very much again, super help. First time using this app and I love it!
Customer: replied 12 days ago.
Oh and sorry, would have one more query. Would I get the full difference back from the HRMC? So let’s say: I pay back £20K to my employer vs. a net sign-on bonus of £11K, would I get back £9K from HRMC? Thank you!

That is correct.  You may receive a full refund, unless there are tax bracket issues however assuming that is not the case you will get the full amount of tax back you are due.

RJM Law and other Employment Law Specialists are ready to help you
Customer: replied 12 days ago.
Thanks! And back to the other questions.. if I understood you well: once I repay I can contact the HRMC and ask for a tax rebate right away. Is the tax rebate a straightforward process to get the money back or is it a complex deal? It can be done online/is there any specific guide available on internet?
Customer: replied 12 days ago.
Hello there, let me know if the question makes sense to you!