Redunancy, SIPP, and Child Tax Creidts

Man_on_fire · 23 May 2015 at 9:20PM

Hi all I have a question. I was recently made redundant, and now have a new job, But as I was paid in lieu of notice from my previous employer meaning that by the end of this tax year we will have probably have earned over £8,000 more than we did last year.

As working/child tax credit awards are based on last years earnings, and the first £5,000 is ignored does that mean that w will loose 41% of only the £3,000 over this limit? Or on the whole £8,000?

If so If I put £2,400 into a SIPP, that our working/child tax credits won't be affected this year, but will be readjusted next financial year? but by then my pay will have dropped back down, (I'm now on a lower wage) i would only be affected by the £2,500 disregard on loss of earnings?

Mensch · 23 May 2015 at 9:31PM

I think you're on the wrong forum with this question but if you could get TC Office to consider the £8000 paid in lieu of notice as a redundancy payment, you probably wouldn't have to declare it all. The first £30000 in redundancy payments are non-taxable for TC purposes.

If you can't, it's only the figure above the £5000 which would be relevant.

This scenario (SIPP or no SIPP) doesn't make any difference to your entitlement.

Bu put it on the right forum and blondebubbles will get you sorted tout de suite!

Man_on_fire · 23 May 2015 at 9:36PM

Ok thanks, it wasn't all in lieu of notice, only about 4k was, the rest is due to my partners earnings for the previous year, due to maternity and time off etc. but thanks I'll repost in on other forum

Redunancy, SIPP, and Child Tax Creidts

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