Deleting the basic pay entirely is sufficient to prevent the tax refund as long as you don't press the calculate button on the current period tab of the employee. Just delete the BASIC line (and any other lines on the Pay tab), calculate the payroll, and that should do it.

It recalculates all employees when you ask for a report, but that in itself doesn't force a tax refund for an employee with no payments. Only pressing the individual calculate on the employee "This Period" tab does that.

Check that there are no zero value one-off lines on the "This Period" (ie Week/Month x) tab of the employee as well as no lines on the Pay tab. If there are any then delete them and then try asking for the period summary report again.

It is offering a rebate because the employee has another month of tax free pay. Therefore, technically, they have overpaid tax at this point.

If still perplexed then email support@12pay.co.uk a backup of the database and we'll explain what is going on.