Redundancy and tax implications - help!

Ihavenoidea_2

Pls forgive me if I dont do this bit right, but this is my first time on here. Can anyone advise on the best option for me.
I am about to be made redundant on 31st March, however I have the option to work 2 more weeks at another location, taking my employment to mid April.
I earn £32k so a basic rate tax payer. The redundancy will be £50k.
I understand the first £30k is tax free, but the remainder of apx £20k will be added as income to either the tax yr 2010/2011 - or 2011/2012 if I decide to work the extra weeks.
I am reading some very new details on paye on tax for the yr 2011/12, but confess not to understand the implications. Can anyone tell me based on the simple facts above which yr I should take the redundancy payment.
Kindest of regards

LittleVoice

If I were you I would work the extra couple of weeks (two more weeks' pay) and move the tax liability on the £20K to 2011-12 - that is unless I thought I would very quickly get a job that is paying the same as my current salary or even more.

Ihavenoidea_2

Hi - thanks for your reply. That was my initial thoughts, to move the liabilty onto the next year as I am thinking of taking some time off. However..... someone on here mentioned about the new HMRC tax rules coming into play 6/4/11, which meant any taxable lump sums would be taxed at source at the highest rate? I've searched through some websites, but cant see actual facts and figures, just statements like 'new tax rules means you end up paying more up front then claiming back later'.
All a bit difficult at the mo - I may have to just bite the bullet so to speak.
Cheers for reply.

getmore4less

Any PILON or holiday pay included in the package?

Get as much paid this tax year and the rest next unless you think you will be earning more next year

If the holiday year is April then they should make you take the accrued but not taken statutory holiday, they could pay over statutory in this tax year.

Ihavenoidea_2

Hi - No PILON, and a few days holiday. If I dont work the extra time, all will be paid on 31st March, and therefore this tax year. I have the choice of pushing it into next yrs tax bracket, but worried about these new tax rules coming into play.

getmore4less

Ihavenoidea wrote: »

Hi - No PILON, and a few days holiday. If I dont work the extra time, all will be paid on 31st March, and therefore this tax year. I have the choice of pushing it into next yrs tax bracket, but worried about these new tax rules coming into play.

What new tax rules?

Ihavenoidea_2

HMRC will be taxing at higher tax levels up front and you then have to claim back. Currently they tax anything over 30k at 20% and you have to pay back 10mths later anything that should have been at higher rate. new rules state different levels at 20%, 40% and 50% meaning they get more now rather than you

getmore4less

If you think you overpaid do a P50