Expert: Shirley McAllister, CPP, PHR - 10/5/2011

Question
Hi Shirley,

Just wandering if you could help me. First I should point out this is a question with regards to the UK tax brackets.

I received a bonus of £5500 for a 2 year commitment in my work place. Taxable I recieved £4214.

I'm now leaving my current employment before the 2 year commitment is finished and have repayed £4214.

I've been told I can reclaim tax from the £4214 I've payed back, but honestly I don't know why I'm entitled to it, or how much. If I was taxed on a £5500 bonus and repayed the amount minus tax, doesn't that mean that I'm 'even' with the tax man?

Any help would be greatly appreciated. Thanks.
John O.

Answer
If you only paid back net amount of the bonus and taxes were taken out on the gross amount you have paid the taxes. I would think that this makes you even. I do not see why you would recieve a tax credit for the 4214.

I just might mention that if the bonus put you in a higher tax bracket and you paid more taxes than were necessary because of the bonus you may be eligible for a refund of some of the paid taxes back.

Shirley