Have I paid too much tax on my redundancy?

2littleducks

This may be a case of wishful thinking, but have I paid too much tax on my redundancy money?

My salary was over the threshold for the higher rate of tax so I always correctly paid 40% tax on that. Got my redundancy through - the first 30k is tax free so I've only had to pay tax on the rest, which is under the £31,785 basic rate threshold, so why have I had to pay tax at 40% on it?

saverbuyer

2littleducks wrote: »

This may be a case of wishful thinking, but have I paid too much tax on my redundancy money?

My salary was over the threshold for the higher rate of tax so I always correctly paid 40% tax on that. Got my redundancy through - the first 30k is tax free so I've only had to pay tax on the rest, which is under the £31,785 basic rate threshold, so why have I had to pay tax at 40% on it?

I assume the 1785 was on top of that months salary?

chrisbur

Without full details cannot give any specific answers but in general if you have earnings that take you into the 40% bracket then the taxable part of your redundancy will be taxed at 40% as advised. But this is not necessarily the end of the matter. What taxable income you have between now and the tax year end may affect the tax you have paid. If your average taxable pay from now on is below the level for 40% tax then some of the tax you paid at 40% will be converted to tax at 20%.

For a better idea you need to give full details of pay/tax/taxcode/tax month or week, from last payslip. Same for redundancy if paid separately, and then an indication of taxable income for rest of tax year.

teddysmum

2littleducks wrote: »

This may be a case of wishful thinking, but have I paid too much tax on my redundancy money?

My salary was over the threshold for the higher rate of tax so I always correctly paid 40% tax on that. Got my redundancy through - the first 30k is tax free so I've only had to pay tax on the rest, which is under the £31,785 basic rate threshold, so why have I had to pay tax at 40% on it?

You also have to include any earnings this tax year which is nearly two thirds over.