Should I accept voluntary redundancy.....?

ciscoda

I have worked in the same company for 25+ years, and I have been interviewed today regarding VR. The department I currently work in is being outsourced and the department will close in March. The company have no permanent position for me but are offering a me a temporary role or VR. The temporary role is not really what I want to do going forward and maybe for as little as 6 months.
The VR is quite generous at nearly 2 years pay to go, my dilemma is knowing what to do going forward and whether I can secure a new job, I know the first £30k is not taxed, but if I don't get a new job will I get a tax rebate on the tax I will pay on the remaining money and when can I claim that back - straight away or at the end of the tax year in March 2015. ? Can I claim anything benefits wise if I don't get a new job ?
Any advice would be welcomed and any tips on getting the best out of the situation....thanks in advance...

getmore4less

What is the package if the temp job finishes?
That will be the key(bird in the hand etc.)

When will the current VR package be paid? (critical)

If march and this tax year then no chance of a refund, if you get it in the new tax year then anything over £30k will be classed as income for that tax year.


What about getting a job at the outsource company(if UK based it may be a potential TUPE anyway).

Contributions JSA for 6 months as long as you look for work.

What's the pension situation?

Pension is another way to mitigate the tax situation but needs specialist advice.

ciscoda

Thanks for the swift reply.....

The package will probably change, I discussed this today and the current offer may not be repeated.

The VR will be paid in April \ May 2014.

There is no TUPE as the out sourcing is outside UK.

My pension is secure and will be frozen, as far as I am aware.

The Tax implications are worrying me the most, and if I took a year out would I get a tax rebate and when , as I might look at re-training as an option for a total career change.

getmore4less

If paid in the new tax year then look at a P50 (google HMRC P50)

If able then maybe a job at the outsourcer might be an option, family or location often make this a no go.

getmore4less

As to the package,

Statutory is max 30 weeks capped at £450pw(changes in Feb).
(20 years at 1.5weeks per year over 41 so yours is probably less but at least 20weeks)

2 years is a lot more.
I would be really tempted to cash in while the money is on the table chances are it will get less next time.

Get the package nailed then you could try to negotiate a termination date further out to help with handovers etc. to give you a bit longer to find work.

Colin_Hunt

Do you have kids?
Does your partner work?
Dont underestimate the value of tax credits
http://www.entitledto.co.uk/

Taranaman

Suggest you negotiate also for some career coaching and support if you have not needed to job hunt for a while to help get CVs, interview techniques etc sorted. The money will tide you over but adjusting to the shock of the change will take some getting used to. It's a good package so don't settle for the temporary work unless a similar deal is there at the end of the temping period

p00hsticks

ciscoda wrote: »

The VR is quite generous at nearly 2 years pay to go, my dilemma is knowing what to do going forward and whether I can secure a new job, I know the first £30k is not taxed, but if I don't get a new job will I get a tax rebate on the tax I will pay on the remaining money and when can I claim that back - straight away or at the end of the tax year in March 2015. ? Can I claim anything benefits wise if I don't get a new job ?

I'm not a tax expert but.....
When would your redundancy date be - this tax year (ie.e. on or before 6th April 2014) or next ?
Without knowing this, how much you earn or how much over £30,000 you expect to be paid in redundancy I don't think anyone will be able to give any categoric advice on the tax situation.

As far as benefits go, your NI record will automiatically entitle you to claim claim six months contributions based JSA (currently £71.70 a week) as long as you are actively looking for another job. Note that this is a taxable benefit.

With a redundancy package the size of yours, you won't be entitled to any means tested benefits such as Housing Benefit or SMI (Support for Mortgage Interest)