tax on lump sum

smedleyswife

hi, i am applying for voluntary severance, I will receive £56000 of which £30000 is tax free this will be paid on 30 June 2009. I earn £42847 -anyone know how much tax will I pay on the lump sum and if I don't get a job straight away can I reclaim any of the tax. Also will I be entitled to contribution based JSA if I take voluntary severance?

thanks
sw

Debt_Free_Chick

The excess over £30k i.e. £26k will be added to your income for the rest of this tax year, so you will be taxed as if you had earned £x plus £26k. Your employer should pay this via PAYE and deduct the correct amount of tax, some of it at 40%. If you earn nothing else for the rest of this tax year, then the tax deducted this way should be exactly the tax you are due to pay, with no shortfall and no overpayment. Check that your employer is going to do this.

I have no experience of JSA, but from other posts, I think you can still claim contribution-based JSA if you take voluntary severance - hang around for other replies though. Perhaps just enquire at the Job Centre (or whatever it's called now) and have them go through your entitlement with you.