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    • amc1
    • By amc1 14th Jul 17, 9:38 AM
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    amc1
    Redundancy & pension payment
    • #1
    • 14th Jul 17, 9:38 AM
    Redundancy & pension payment 14th Jul 17 at 9:38 AM
    Hi, in March (tax year 16/17) I was made redundant and received a taxable £115k payment in my final pay packet (actually received £145k but the first £30k is not taxable). Via PAYE I have paid 40% tax on this figure.

    After advice from my company, my pension provider and speaking to the tax office twice about my plans - In April (tax year 17/18) I used some of my own savings to add to the redundancy figure and paid £115k (I checked this was a permitted amount) into my pension pot.

    I then wrote a letter to the tax office to request a rebate of the 40% tax paid on the original £115k. This equates to a refund of £46k.

    After a wait of eight weeks I have now received a letter asking me to complete a self-assessment as my earnings for 16/17 were over £100k. I wasn't aware of this requirement and am a bit miffed that I had not been advised about it before but ok I can do this.

    But I am now worried about the overall outcome of this. I don't want to end up in the position of having already paid tax and then paying it again when I take it out of the pension.

    Am I needlessly worrying or have I done something wrong / been advised incorrectly ?

    Thank you.
Page 2
    • amc1
    • By amc1 15th Jul 17, 11:39 AM
    • 1,303 Posts
    • 245 Thanks
    amc1
    Yes, just looked back. What a mess !

    I was made redundant on the 16th March 2017. I have an e-mail that effectively says my redundancy would be paid on the 15th April but was then paid on the 29th March.

    I emailed my pension provider on 27th March asking for the maximum amount I could pay into the pension but they didn't reply with that figure until 5th April.

    In that e-mail they said "you will be responsible for claiming back any tax back from HMRC and we will write to you with confirmation when the payment has been invested, which you can use to reclaim any tax liability on this payment."

    I was only allowed to pay by CHAPS transfer.
    Last edited by amc1; 15-07-2017 at 11:51 AM.
    • amc1
    • By amc1 15th Jul 17, 11:44 AM
    • 1,303 Posts
    • 245 Thanks
    amc1
    "After advice from my company, my pension provider ..." Was any of this advice in writing and if so what exactly did they say?
    Originally posted by squirrelpie
    "xxx does not operate a payroll facility to enable you to surrender some or all of your redundancy payment into your pension scheme. However, if you wish to pay some or all of your redundancy payment into the pension scheme you can contact the pension scheme provider directly to arrange payment. Further details of
    the process and the time limit for this option can be found in the FAQs.". The time limit it refers to here refers to the 3 months that I had to pay into my pension scheme.
    • AnotherJoe
    • By AnotherJoe 15th Jul 17, 11:50 AM
    • 7,559 Posts
    • 8,161 Thanks
    AnotherJoe
    "xxx does not operate a payroll facility to enable you to surrender some or all of your redundancy payment into your pension scheme. However, if you wish to pay some or all of your redundancy payment into the pension scheme you can contact the pension scheme provider directly to arrange payment. Further details of
    the process and the time limit for this option can be found in the FAQs.". The time limit it refers to here refers to the 3 months that I had to pay into my pension scheme.
    Originally posted by amc1
    Unfortunately thats completely generic advice and as a result misleading. Were you earning money elsewhere this tax year you could have put money into that pension, or a pension of your own choosing, and got the tax relief (subject to limits). You could also have opened up a separate pension and put money into that in the last tax year.

    I think you've probably lost the opportunity to claim that relief now because that money is inside a pension so even if you got a new job i dont think you could reuse that allowance.

    Maybe there is some trick that can be done by someone who really understands the ins and outs of this but on the face of it i think that opportunity is gone.
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