tax year for payment in lieu of notice

d2001

Hi Board,

I would appreciate some advice/info on the following:

I've left my company on 31st March this year, after a settlement agreement. I got paid on April 20th this year for the settlement and 1 months wages in Lieu of notice (I had a month termination clause) in my contract. However, I was shocked to find I was taxed for the months lieu if notice in the 13/14 tax year, I was expecting it to be in the new 14/15 tax year. The lieu of notice was for the work I would have done in April and was paid in April, however, my last official working date was 31st march. Now I'm having to pay 40% tax on the lieu of notice as it was in the previous tax year, if it was in the new tax year, 14/15 I would have to pay any tax as I don't currently have a job and is well below the basic 10k threshold.

Should the lieu of notice be actually part of the new 14/15 tax year? If so, what can I do to get it changed. I've spoken to my previous company but said they can't change anything. Please could someone suggest who I should contact next, inland revenue, employment solicitors?

rgds
TSM

marlot

If you left on 31st March then that's the date they have to use, as I understand it.

getmore4less

I think your only hope will be to have a good look round HMRC web site and/or phone them.

If you can't get the tax year changed look at if it should have been taxable.

Is there a PILON clause in the contracts or is PILON a normal practice of the company.

d2001

Hi

Thanks for your reply. Yes there is a PILON clause in my contact which is why they had to pay it... I guess I'll now have to talk to the HMRC regarding this now....

getmore4less

d2001 wrote: »

Hi

Thanks for your reply. Yes there is a PILON clause in my contact which is why they had to pay it... I guess I'll now have to talk to the HMRC regarding this now....

They can still pay PILON without the clauses but it then can become tax free so it would not matter if the rest of the payments(including PILON) were under £30k..

why did you not delay the termination till the new tax year since it was a negotiated exit?


Check the rules on pension contribution, might be too late.

d2001

hi
It all happened so fast, as I thought I wouldnt get paid until 25th April, I would be covered by the new tax year.... oh humm, I'll go back to the hrmc and see what they say.... thanks

chrisbur

d2001 wrote: »

hi
It all happened so fast, as I thought I wouldnt get paid until 25th April, I would be covered by the new tax year.... oh humm, I'll go back to the hrmc and see what they say.... thanks

For a 25 April payment I would have expected to be new tax year, can you give full details of payslip.