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Offsetting Redundancy Tax...
![Scooby_Drew](https://us-noi.v-cdn.net/6031891/uploads/defaultavatar/nFA7H6UNOO0N5.jpg)
Scooby_Drew
Posts: 37 Forumite
Hi guys,
I am hoping to start my MBA at the end of August... course fees i owe will be approx £16,000, which I will already have paid 50% tax on (therefore effectively "costing" me £32K).
A question for the tax folks out there...
If my company were to knock £16k off my redundancy payment and pay this direct to the business school, as a gift, scholarship or whatever, would this be a reasonable way of avoiding the tax???
Thanks in advance, either way...
Scoob
I am hoping to start my MBA at the end of August... course fees i owe will be approx £16,000, which I will already have paid 50% tax on (therefore effectively "costing" me £32K).
A question for the tax folks out there...
If my company were to knock £16k off my redundancy payment and pay this direct to the business school, as a gift, scholarship or whatever, would this be a reasonable way of avoiding the tax???
Thanks in advance, either way...
Scoob
0
Comments
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I don't think they can do that it is still BIK that is taxable.
you must be getting a massive payout to hit £16k worth at 50%
total for the year redundancy including income needs to be in excess of £195k.0 -
"total for the year redundancy including income needs to be in excess of £195k. "
Really?
I'll be honest, I'm getting nowhere near that... I was under the impression that the first 30K is tax free, then the next £2917 is @ 20%, the next £9583 is @ 40% and the remaining amount is 50%.
I earn less than £35K and am getting approx £60k package.0 -
You have been misled if that's what someone has told you.
You have to earn a total of £150k before 50% tax kicks in for the year.
http://www.hmrc.gov.uk/rates/it.htm
It will look like it is taxed higher but that is reclaimable.
look up P50 for one way to do this.
Will depend on exact amounts
£35k April til Aug is 5 months so £14.5k + £30k you will end up paying 40% on about £2k the rest 20% or less.0 -
Thanks for that... I was under the impression the rules on redundancy had changed.
http://www.mulberryfinch.com/news/50-percent-redundancy-tax/
Now I'm really confused...0 -
Right, M4L... I think I understand a bit better now...
I was told (albeit by a non-tax expert!) that the redundancy tax was separate to income tax and not off-settable.
So basically, my entire tax liability for the fiscal year (as I won't be earning a penny more in 11/12) will be around £9K or so inc my (small) bonus etc??
Phew... that's a massive weight off my mind.
Do you know if students can still fill in a form to get the tax back early, or will I have to wait until the end of the tax year? (I fill in a SA tax return myself anyway).0 -
see of a P50 works look up on hmrc might be worth just filling one in anyway.0
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