Reclaim of overpayment from leaver - repayment plan

Guidance required please on a repayment plan for an overpayment made to an employee, where a monthly instalment has been agreed over a period of time, (across tax years) to repay the balance. Should the overpayments made YTD at the tax year end be reported via FPS, OR, should the repayment be reported via FPS only once the full amount has been repaid?

Hi ,
 

You would need to send amended FPS to correct the periods where the overpayment occurred. The amount recovered from the employee should be the net amount not the gross. These amendments will then create an overpayment on your account that you can reclaim or use to offset future liabilities. If the unintentional overpayment is discovered in year and the employee continues to be entitled to employment income, the employer should correct the mistake, by correcting the employee payment details on the relevant Full Payment Submission/s (FPS). (Correcting these details doesn’t create another FPS, the changes will be sent as part of their next FPS)   The employer can reduce their future payment/s to HMRC, to recoup any overpaid tax/NICs they had previously paid on the overpayment. If the unintentional overpayment is discovered after the end of the tax year, the employer should correct the mistake, by correcting the employee payment details on the relevant Full Payment Submission/s (FPS), followed by submitting a revised final FPS.   The employer must give their employee details of the amendment either in a letter showing the amendment or in a new P60 marked ‘REPLACEMENT’.   The employer can reduce their future payment/s to HMRC, to recoup any overpaid tax/NICs they had previously paid on the overpayment. If they are unable to self-serve they can claim a repayment . Thank you .