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The Fat Cat says:
The first thing to check is that you definitely owe them the money. Speak to Citizens Advice or Legal Aid to see if they’re able to identify any flaws in your employer’s argument.
If you were unaware at the time your employer overpaid you and you have now spent the money, you’re within your rights to pay them back on your own terms. After all, it was their error in the first place.
Suggest a reasonable amount, possibly an initial one off payment of £86 and then £20 a month for the next 35 months, which would clear the debt. Only offer them what you can afford and don’t feel bullied if they start to play tough and threaten you with court action.
The good thing is that you don’t have to keep working for the employer while this issue is resolved – in fact, if it’s causing the relationship to turn sour, it’s probably best that you don’t.
If you do want to leave its worth working out if you have any holiday entitlement due to you that you could exchange back for part of the debt. Always try and end your term with any employer on good terms. You never know when you may come across them again in your career.
It’s never nice to have to hand money back that you thought you were due, but then again if you owe it, you owe it. On the other hand, just because they claim there has been an overpayment, can you trust an accounts system that made the error in the first place?
The best thing to do is explain the situation in full to a legal expert and find out the options.
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