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Does redundancy compensation count as income?
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treganna
Posts: 1 Newbie
Hi forum. First post after months of lurking.
I have taken voluntary redundancy from the civil service at the end of jan and for the first time in my life I will be paying 40% tax on the compensation lump sum. I would like to recieve some of the tax benefits of investing part of it in a SIPP or stakeholder pension but I am limited to "100% of income for tax year".
So, does that annual income include the lump sum? The amount i will be taxed 40% on will be greater than my earnings up to end of jan (if that makes sense) and i'm taking into account the £30,000 tax free limit.
any help would be appreciated.
I have taken voluntary redundancy from the civil service at the end of jan and for the first time in my life I will be paying 40% tax on the compensation lump sum. I would like to recieve some of the tax benefits of investing part of it in a SIPP or stakeholder pension but I am limited to "100% of income for tax year".
So, does that annual income include the lump sum? The amount i will be taxed 40% on will be greater than my earnings up to end of jan (if that makes sense) and i'm taking into account the £30,000 tax free limit.
any help would be appreciated.
0
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AIUI the amount over £30k that is added to the income can be pensioned gross.0
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