Do I pay tax on the full amount of separation pay?

[Deleted User]

I have taken early retirement back in November 2006 and have just received a Tax Calculation for that year showing I have overpaid slightly.

What caught my eye was that included in the calculations was the full amount of separation pay when I thought that the first £30,000 was not taxed.

I also had some of my pension as a lump sum and believe this is not taxed at all.

Can someone let me know whether the above points are right please?

Thanks.

[Deleted User]

Ooops, don't worry about replying, just sussed out that my salary up to retirement was near enough to the separation pay to look like I was taxed on the whole amount.

In fact they have taxed me on my salary plus the separation over £30000.

Thought I was due a windfall for a few minutes there....

Retired_I.F.A.

What is seperation pay?

Cook_County

It may be greater than £30,000 if there was foreign service.

[Deleted User]

Retired_I.F.A. wrote: »

What is seperation pay?

It's so many months wages as a "sweetener" to accept early retirement.

In my case it was 16 months, (but I did have over 35 years service).

Retired_I.F.A.

Ah gotchya, thought for a mo it was a new word for redundancy pay. You know what I mean "stigma removed"

Mind, it really all means the same.... "your too expensive here's £x now sod off"