Redundancy pay and future earnings

senwar

Just after a little advice.

I've received my redundancy pay today and received a bit less than I expected (PiLON, not the redundo - bloody tax!). Anyway, my NI contributions in the PiLON seems quite low? Any idea why?

Also - I started a new job on Monday. Am I likely to be clobbered between now and the end of the tax year for tax? i.e. is it likely I'll pay 40% tax on all of my future earnings until April?

Ivana_B_Rich

senwar wrote: »

Just after a little advice.

I've received my redundancy pay today and received a bit less than I expected (PiLON, not the redundo - bloody tax!). Anyway, my NI contributions in the PiLON seems quite low? Any idea why?

Also - I started a new job on Monday. Am I likely to be clobbered between now and the end of the tax year for tax? i.e. is it likely I'll pay 40% tax on all of my future earnings until April?

Sorry I don't know anything about the NI question, but if your P45 shows taxable pay to date of over 37k then you will take a hit on the tax.

Sorry it's bad news I'm in the same situation myself. Well done for getting a new job so quickly though.

senwar

Thanks a lot.

Can't complain I suppose. Soon be April!

senwar

Sorry to ask this again, and I think I may need to speak to a tax advisor, however, I'm confused about my PiLON payment.

I've been taxed exactly 40% on the whole of my PiLON (I am in the high bracket). However, had I earned this during 3 months instead of being paid up front, I would have paid at least £1400 less tax based on my previous pay slips.

Will I be entitled to a rebate at all at any time, or is this correct?

Just looking at my final payslip and my taxable earnings to date was £38486.06. Now if I'm correct, I am entitled to the first £6510 tax free (651L tax code), then the next £37400 at 20%, and from £43910 at 40%? Is this correct?

My PiLON was £11979 and holiday pay £308.72 giving £12287.72 taxable pay. Add this to my previous taxable pay then this comes to £50773.78. Now - shouldn't this therefore mean £5423.94 is taxable at 20% (allowance of £43910 - taxable to date of £38486.06) leaving the remaining £6863.78 as taxable at 40%?

Or have I got it completely wrong?

senwar

senwar wrote: »

Sorry to ask this again, and I think I may need to speak to a tax advisor, however, I'm confused about my PiLON payment.

I've been taxed exactly 40% on the whole of my PiLON (I am in the high bracket). However, had I earned this during 3 months instead of being paid up front, I would have paid at least £1400 less tax based on my previous pay slips.

Will I be entitled to a rebate at all at any time, or is this correct?

Just looking at my final payslip and my taxable earnings to date was £38486.06. Now if I'm correct, I am entitled to the first £6510 tax free (651L tax code), then the next £37400 at 20%, and from £43910 at 40%? Is this correct?

My PiLON was £11979 and holiday pay £308.72 giving £12287.72 taxable pay. Add this to my previous taxable pay then this comes to £50773.78. Now - shouldn't this therefore mean £5423.94 is taxable at 20% (allowance of £43910 - taxable to date of £38486.06) leaving the remaining £6863.78 as taxable at 40%?

Or have I got it completely wrong?

Anyone? Not sure if I'm right.

getmore4less

senwar wrote: »

Sorry to ask this again, and I think I may need to speak to a tax advisor, however, I'm confused about my PiLON payment.

I've been taxed exactly 40% on the whole of my PiLON (I am in the high bracket). However, had I earned this during 3 months instead of being paid up front, I would have paid at least £1400 less tax based on my previous pay slips.

Will I be entitled to a rebate at all at any time, or is this correct?

Just looking at my final payslip and my taxable earnings to date was £38486.06. Now if I'm correct, I am entitled to the first £6510 tax free (651L tax code), then the next £37400 at 20%, and from £43910 at 40%? Is this correct?

My PiLON was £11979 and holiday pay £308.72 giving £12287.72 taxable pay. Add this to my previous taxable pay then this comes to £50773.78. Now - shouldn't this therefore mean £5423.94 is taxable at 20% (allowance of £43910 - taxable to date of £38486.06) leaving the remaining £6863.78 as taxable at 40%?

Or have I got it completely wrong?

If you go back to work the p45 will sort it out with the next employer and the tax return will make sure at the end ofthe tax year.
If you don't and claim JSA you have to wait to the end of the tax year, if you don't claim JSA I think you can claim back(not sure how).

I think the problem with PILON might be it gets added on to the annual total as if you had worked for a PAYE even though it is substitute pay.

PILON at the end of the tax year(for a HRT) is bad because it gets taxed in the year it is paid, even though it would have been taxed in a different year if worked.

senwar

getmore4less wrote: »

If you go back to work the p45 will sort it out with the next employer and the tax return will make sure at the end ofthe tax year.
If you don't and claim JSA you have to wait to the end of the tax year, if you don't claim JSA I think you can claim back(not sure how).

I think the problem with PILON might be it gets added on to the annual total as if you had worked for a PAYE even though it is substitute pay.

PILON at the end of the tax year(for a HRT) is bad because it gets taxed in the year it is paid, even though it would have been taxed in a different year if worked.

Thanks.

I've gone back to work, and handed in my P45 today. Have to say the whole PiLON thing is not too clear.

I don't usually do tax returns either - should I do one this year, or should I just expect it all to be OK?