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Posted Sat, 24 Feb 2024 15:30:39 GMT by Rubicon678
I recently changed jobs and as a part of this, I had to pay a contract buy-out fee to my previous employer. Can I reclaim the tax on this buy-out?
Posted Tue, 27 Feb 2024 10:55:10 GMT by HMRC Admin 8 Response
Hi,
If you are required to complete a self assessment tax return, you should follow the guidance below when completing SA102 or the online equivalent.
If you’ve had to pay back money to your employer due to a contractual agreement (often known as claw back), reduce the amount of pay in box 1 by the amount paid back.  
If the result is a negative amount, enter zero in box 1. Include the negative amount, but as a positive figure, in the ‘Post-cessation trade relief and certain other losses’ box, box 6 in the ‘Other Tax Reliefs’ section on page Ai2 of the Additional information page (SA101).
Enter a note to explain why you’ve done this in box 19 ‘Any other information’ on the SA100.  
If you’ve had to pay back money to your employer due to a contractual agreement (often known as claw back), reduce the amount of pay in box 1 by the amount paid back.  
If the result is a negative amount, enter zero in box 1.  Include the negative amount, but as a positive figure, in the ‘Post-cessation trade relief and certain other losses’ box, box 6 in the ‘Other Tax Reliefs’ section on page Ai2 of the Additional information page (SA101).
Enter a note to explain why you’ve done this in box 19 ‘Any other information’ on the SA100.
If you are not required to complete a self assessment tax return, you will need to submit a claim in writing, to H.M. Revenue and Customs Pay As You Earn BX9 1AS, providing evidence of the claw back.
Thank you.

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