Urgent tax advice needed re redundancy, anyone please?

Lizbetty

Hi everyone

We are panicking slightly as my dad is currently being pressured to decide whether or not to take voluntary redundancy.

We are worried as he is 60, and mum and dad are in quite a lot of debt, and so we need to make sure that they make the right decision.

We have had all sorts of info on the tax issue, we are wanting to know really about the tax issue.

Is tax payable on redundancy payments? Is it more so if he opts for voluntary redundancy?

There is a chance they will make make him redundant anyway, which would be the best option really as he would be able to claim contribution based JSA more quickly from what we gather, too. Tho he wants to get a job asap really.

It's a long story but if anyone can help re the tax issue or if you need any more info, please get in touch. We're struggling to get the right info at the moment (the Union rep isn't very helpful unfortunately).

Many thanks folks
Best wishes
Lucy

ceeforcat

The first £30000 of his redundancy payment is tax free as are any non-contactual Payments in lieu of notice.

barak

Lucyeff - I'm sure ceeforcat is correct, and I have no special expertise in this area, but before accepting any sort of 'Voluntary Redundancy' payment your Dad must make sure that his situation will definitely be classed as 'Redundancy' by the tax authorities, otherwise it could be taxed. His company should be able to confirm this, and I would want it in writing.

Perhaps somebody else can comment.

jimmo

ceeforcat wrote: »

The first £30000 of his redundancy payment is tax free as are any non-contactual Payments in lieu of notice.

I’m being a bit fussy here but that could be open to misinterpretation.
If you are made redundant then the payments you get are either contractual or compensation.
Contractual payments are taxable in full.
Compensation payments which include Redundancy payments and non contractual Pay in lieu of notice all have to be totalled and the first £30,000 is tax free. The rest is taxable.

telsco

I never knew when I was made redundant that the Pay in lieu can be included in your tax free lump sum. My solicitor didn't tell me until it was too late so I got taxed on it

Lizbetty

Thanks for the help everyone, we really appreciate it.

He's decided after much thought to wait and see if he gets made redundant - they put him through an unfair disciplinary and this will count towards his 'points' as far as his redundancy goes, so it's more than likely they'll make him redundant anyway without him having to take it voluntarily.

Sounds like it's worth the gamble, from a tax and a contribution based JSA point of view.

Best of luck luck to anyone else who is unfortunate enough to be suffering in the current climate, and thanks to everyone for your very kind advice.

Best wishes
Lucy