Redundancy Payments - Help!!!

chloe3108

I am currently working my notice, last day of service is 25 March. I had the option of having my Redundancy payment split to hopefully avoid being heavily taxed. I have now been informed by me employer that the Tax Office will now tax my second payment in April as though it is my monthly pay meaning I will pay 50% tax and then not claim this back until 2012!!! How can this be right!!?? Help anyone!

getmore4less

Look up a P50

If you get another job it will be repaid(in part or all) through PAYE over the year.

chloe3108

Thanks will do that

isplumm

chloe3108 wrote: »

I am currently working my notice, last day of service is 25 March. I had the option of having my Redundancy payment split to hopefully avoid being heavily taxed. I have now been informed by me employer that the Tax Office will now tax my second payment in April as though it is my monthly pay meaning I will pay 50% tax and then not claim this back until 2012!!! How can this be right!!?? Help anyone!

Remember that some of your redundancy payment could be tax free.

Mark

lynnemaria115

I am in exactly the same position. My 30k tax free will be paid in March, last day of service March 25th, then the rest of redundancy paid in April. I have been told that this may be taxed at 50% and not repayable until the end of the tax year. I have called the tax office and they say that if I write to inform them that I do not expect to be earning anything in 2011-12 then I can have the refund early as I will need the money to live on. This includes not claiming job seekers allowance as that is taxable. The amount involved is an extra £8000 in tax that I would have to wait a year for as I am not seeking employment for a while to enjoy life a bit. My problem is that if I cannot manage on the money I will have, I may need to claim my pension early in the tax year 2011-12 (I will be 55). I am hoping not to do this but may need to. Will I land myself in trouble with the tax man or do I just inform the pension people that I have already had my personal tax allowance for the year? Help!

getmore4less

Don't plan to sign on or get another job for at least a month.

Look up p50, get it ready forthe day you get your P45

here is a link,

http://www.hmrc.gov.uk/pdfs/p50.pdf

follow the rules.

Tick box 3(or other if it applies)

send it off with P45

wait a bit, new P45 arrived and the refund.

get a job/sign on.

Should take no longer than 2 months

lynnemaria115

Thanks,
Really helpful answer. I still hope to get by without the pension (and so lose less) but this has really set my mind at rest. Really don't see why the taxman should have my money for so long anyway. I don't mind paying what is due but that is it.

CharlieBilly

CatalinaMadnickh nasty little :spam: merchant