Redundancy payment questions

bon98uk

Hi All,

I have some questions about my impending redundancy (I am also taking Early retirement.)

1) How is the redundancy payment made? Is it a seperate cheque or do I get a 'fat' final salary payment? (Amount is in excess of the £30K so I'll pay tax on that excess)

2) What tax rate will I pay if the extra takes me above the next tax threshold. (I think I know this!)

3) As my salary is ending and a pension payment is starting should I get the Tax office to change my code immediately. (I'm guessing I do)

scottn

1) its almost always paid the same way as your salary and in your final salary, so yes, probably straight into your bank account.

2) the answer you dont want to hear...the tax level at that threshold

3) not sure here?

getmore4less

You will need to go over the £43,875 where 40% tax starts with money so far and excess over 30k and the pension in this tax year.

The may be a way to mitigate some of this and increase your pension, has this been looked into?

If you think the comapny will stay in existance you could also look at deffering some of the redundancy.

bigphil30uk

You should be able to claim a Tax rebate next year if all payments take you into the higher tax band the month your redundancy is paid.I was in same position Dec 2007 with redundancy (over 30K) and 25% taken from pension pot. Claimed in april 2008 and got ~£2000 rebate.