Urgent Help Needed re Tax on Redundancy

zaksamjosh

Hi can anyone help I am being made redundant 31st march 2011. I have been told that the 1st £30k is tax free but the anything after that is taxed at 40%. However I have also been told that if my employers pay my payout after I have left - i.e. as an ex employee then my tax on anything over £30k is only 20%. I have asked my employer to pay my payout 1 month after I have left their employment but they say they cannot as the tax man 'won't' like it. I need to find out if this is a genuine option and if so know where can I find more details to print off to give to my employers.

P.S. My empolyers have said I have until the 24th November to accept their offer otherwise I will lose the package they are offering - it's a minefield and I have very little time to make a decision.:eek:

fuse

Pretty much what you say is right. £30k tax free and then after that anything is taxed as personal income as per normal, so the rate depends on what your pay is. So likely to be 40% as you say if you earned over £43k up till April 6th.

They will pay it as 20% however, you would need to complete a tax return and declare the income, where if it was due to be paid at 40% you will have to make payment to HMRC.

I actually thought it was standard for them to only tax it at 20% as you are technically no longer an employee of them, then complete the tax return etc.