Redundancy and SMP HELP!!

mushypea69

Hi,

I am starting my maternity leave on the 11/02/11. At this time I will also be made redundant as my company is closing.
They have decided to pay my SMP and redundancy as a lump sum at the end of February. Because this is before the new tax year starts on the 01/04/11, I will be liable to be taxed on the whole amount as I have used my tax free allowance as I work full time.

Is there any way around this as if they were not making me redundant and simply paying my SMP, only the first 6 weeks would be taxed and the remainder would be under my tax free allowance for 2011 as it would be paid after the new tax year starts.

Is it possible to have the SMP lump sum as severance pay or does anyone have any suggestions on how I could proceed.

Many thanks for any advice.

[Deleted User]

When is your baby actually due? Are the Company completely closing? and if so are they completely closing before April?

mushypea69

Hi Joanne,

Thanks for getting back to me.

My baby is due on the 14/03/11 so I'm finishing work 4 weeks before. My company is closing completely, however the business does have a separate side which is remaining open. I think it is an 'umbrella' corporation but I'm not too sure.

Thanks

[Deleted User]

Maybe ask if they will pay you Monthly for Feb and March then the remainder as a lump sum in April, you will still get heavily taxed in April but this will be refunded if you return to employment elsewhere in the 2011/12 Tax Year or if you don't then apply for it at the end of the Year. I guess it will boil down to when they plan on shutting their PAYE scheme they may want to finish everything by March to avoid having to make a return next Year.

carolissosmiley_2

Hi, this happened to me last year,

I took VR in feb and baby was due in April, I fought with them and eventually they agreed to pay monthly which they have done. I did get taxed a bit more because I had to go in Feb and obviously the tax year hadn't finished but my point is they were adamant that we MUST have a lump sum when this is not the case,

If the company is still trading in some way like you say "umbrella" then it shouldn't make any difference to them as they claim it all back from the government, Most companies prefer a lump sum cause it's easier for them but I read on direct.gov that they discourage lump payment as it causes problems when some people don't take full amternity time off and end up owing money back.

Hope this helps a bit