Made redundant, not sure my tax is right

SimonInBristol · 17 June 2010 at 4:53PM

Hi,
I was made redundant at the end of April and I am concerned that I may have paid too much tax, so I just wondered if anybody here could please advise.

As it was at the end of April, it was obviously my first pay slip of the year, so the amounts below are for April and also for the Year To Date.

The payments broke down as:

Basic Pay - £5,868
Miscellaneous - £500
Redundancy (Tax Free) - £30,000
Redundancy (Taxable) - £35,000

The taxable pay was £41,368 and the Income Tax was £18,661 (my tax code is 356L).

I have been told that this calculation is correct, because I have received over £12,000 in a single month and so have been taxed at 50%.

Even if that is correct, the calculated tax still seems high to me. I have tried using online calculators, but can't find one that handles this situation.

Any help would be really appreciated.

Thanks,
Simon

Procrastinator333 · 17 June 2010 at 6:57PM

You have paid too much tax.

Being the first month of the year, the tax calc will have taken all taxable pay, about £40k and extrapolated that to say you will earn that much every month for the rest of the year and taxed accordingly.

That is how your ex employer is required to tax your salary. So blame HMRC for this!

What will then happen is you will get the tax back - Either through the payroll of your old company - you may get wageslips with negative tax on for a few months. Or through a new company, or maybe you will need to write to HMRC. If you aren't working again or at the moment, I would write to HMRC. Find the tax office from your last wage slip. Tell them what has happened and ask them to review your tax. you don't need to say anything else.

But you are probably owed a fair bit as you will have gone through the marginal rate of 60% too.

Evilm · 18 June 2010 at 4:39PM

As the last poster said the tax rate will be used as if they are expecting you to get that amount of money all year. Contact your HMRC centre and ask them to reassess you, telling them that you are now redundant. Hopefully you will get the case seen to quickly rather than having to wait for the new tax year.