tax credits and lumpsum

stodgy88

if i take redundancy and get a tax free lumpsum do i have to declare the lumpsum as income when renewing my tax credit award -thanks

blue_monkey_2

You declare your annual taxable income, this will be the amount on your P60 at the end of the year.

amanda40

The first £30,00- that is tax free does not go on form but the balance does. There is a rule about £25,000 too - not quite sure how that works and how it affects your current years payments. My DH is just waiting to hear if he is getting made redundant and I have calculated we will have to pay this years tax credits back, but will qualify for max from April onwards. HTH

stodgy88

saw it on this site (forum) (cant find) that lumpsum was tax free and not included in income figure,

amanda40

Just the first £30,000 though - anything above this is taxable so has to go on Tax Credit form too.

stodgy88

does the same rule apply if taking pension lumpsum

amanda40

Not sure about that - how do you go about taking a pension lumpsum - is there a lower age limit to it? Thanks

stodgy88

work for royalmail, told we can take reduced pension and lumpsum (if between 50 and 55) and continue working ,so obviously weekly pension would affect TC but not sure about lumpsum.