Where do I put redundancy on tax form on the on line version?

cepheus

I have placed the gross redundancy amount ignoring the first tax free 30k, in section 4 'Tips and other payments not on your P60' section. Is this correct?

Should this be gross or net redundancy?

I seem to be amounting a whopping great tax bill despite receiving potential relief on private pension payments so something is badly wrong.

ceeforcat

How was your redundancy payment treated for tax purposes? Was tax taken off the amount above £30000 and included in your P60 - it normally is.

50Twuncle

I agree - what you received should have been net - ie) Tax already taken off it......
In which case - no more tax to pay and even a rebate - if you stopped working half way through the year and you were taxed at "normal rates" through your working period (they assumed that you were going to be carrying on earning the same for the rest of the year)

cepheus

I didn't receive a P60 only a P45, is this right if you didn't work at the end of the tax year?

The latter included some of the redundancy pay in the total, but I received an increased redundancy settlement in the same tax year which isn't included on the P45.

All of the redundancy was received net of basic rate tax with the first 30k ignored of course.

I should have a small rebate according to my calculations since the private pension payment after being grossed up was slightly greater than the gross redundancy (both parts) minus 30k and my salary was already taxed of course.

I assume the untaxed 30k is completely ignored, by that I mean it won't push your remaining income up into a higher tax band.

50Twuncle

Yes - the £30k is ignored - your salary - if they started to tax it, as if you were working a full year - should give you a rebate - but any income that you earned (salary + any redundancy over £30k) will be taxed at 20% - anything over £37,400 will be taxed at 40% (2009/2010 rates)

So if you received over £67,400 - anything over that will be taxed at 40%

cepheus

So if you received over £67,400 - anything over that will be taxed at 40%

Except it shouldn't because more than that has been placed in a private pension which allows one to avoid (or at least defer) tax altogether. Everything above 30k was effectively taxed at standard rate before I received it, then it was grossed up in the pension. So I shouldn't have anything else to pay. However this isn't what the tax bill says!

John_Pierpoint

I think you will have to share the figures with us.

cepheus

I have removed everything from

section 4 'Tips and other payments not on your P60' section.

and added the extra redundancy payment and tax which should be on the P45 (if they paid me it all at once) to

section 4 Pay from (employer) total from your P45 or P60. Enter the amount before tax taken off:

and

Tax taken off employer pay

and it now calculates a small rebate, so that puts me in a better mood! :j

I will just mention the discrepency with what the P45 says somewhere else on the form!

John_Pierpoint

Did your employer hold back the non statutory part of the redundancy payment (as its over 30K I'm assuming there was one), just in case you tried to get "clever" and take them to an industrial tribunal for unfair dismissal?
Is it possible that they failed to give you the statutory notice to which you are entitled or in some other way broke your contract and what you have been paid includes an element of pay in lieu of notice/compensation?
Is it still possible to claim "pay in pay in lieu" as tax free?

cepheus

Phoned the IR up this morning and evidently I forgot to tick the box in part 3 titled "Did you receive any other UK income, for example, employment lump sums, share schemes, life insurance gains?" this opens another box which allows you to enter redundancy directly. This is far harder to calculate than my previous method using the figures on the P45, since this means seperating out the first redundancy payment and salary elements from my final payslip which can only be calculated indirectly. My employer also incorrectly charged me NI on both redundancy payments as well, which was rebated late last year.

Anyway I have finally calculated the same rebate as before (within a pound). This was my work today until 3.30 !

I may send the IR my spreadsheet since they will never be able to see where the numbers come from. Whether this is a good idea I am not sure since it all looks decidedly dodgy due to the splitting of payments even though they are in the same tax year.

cepheus

John_Pierpoint wrote: »

Did your employer hold back the non statutory part of the redundancy payment (as its over 30K I'm assuming there was one), just in case you tried to get "clever" and take them to an industrial tribunal for unfair dismissal?
Is it possible that they failed to give you the statutory notice to which you are entitled or in some other way broke your contract and what you have been paid includes an element of pay in lieu of notice/compensation?
Is it still possible to claim "pay in pay in lieu" as tax free?

I could write a book on this, but to cut a long story short they simply refused to pay the full redundancy despite agreeing to respect the old Civil service conditions. Hence, various calculations and payments were made in year 08/09. Another payment is still due, but will probably require a tribunal.