Pay In Lieu Of Notice - Tax Question

Gareth78

Hi all,

My notice of possible redundancy and 30 day consultation period was given on 10th February and on Thursday 26th I was told I had been selected and was put on gardening leave.

I have been told that i will be paid at my basic rate until 13th March - when the consultation period is over - and then one month's Pay In Lieu of Notice -also at basic rate which takes it until April 13th. I will also be paid my week in hand, with overtime worked, and 6.5 days of accrued holiday pay.

They have told me that this pay will be paid directly into my bank account on this coming Friday, 6th March.

I have no issue with the redundancy, the selection process was open and fair (and I had been there less than two years) but what i'm worried about is being hammered for tax on this lump sum. I have worked out that the total owing, before any tax or NI deductions, will be approximately £2700.

If this is paid as a lump sum and taxed as a weekly wage, I would be left with approximately £1680, after tax and NI. However, if it was paid weekly as I am normally up until 13th April, the sum in would recieve would be somewhere in the region of £2100.

Does anyone know how the lump sum will be taxed? As a weekly wage, as a monthly wage or as a lump sum? It seems very unfair that i could lost up to £500 because they are paying me a lump sum rather than the weekly wage i am accumstomed to.

Thank you for taking the time to read my ramblings and hope one of you may have the answer.

Gareth

olly300

You are probably going to have to repost this on the tax board as that's where the people who either use to work for the revenue or are involved in accountancy/book keeping hang out.

Edited to say: If you do repost it put at the end that you don't want your post moved in bold.