Readers’ forum: Getting HMRC to repay tax wrongly deducted

My client was headhunted by a tech start-up at a salary of £50 000 a year. On the Friday before the Monday when she was supposed to start they rang to say they had reworked the budget and they couldn’t afford her.

The following week the CEO had the decency to ring to apologise and to say that the company would pay her a month’s salary. In my view that is clearly not taxable – she never even started the job and never had a contract. It is purely compensatory and consolatory and not related to any employment.

However the company deducted PAYE and filed a return to show that this was salary for the month of March 2023 – her start date was supposed to be 20 March.

I have written to HMRC to ask for a repayment of this tax as...