Best time for redundancy

Dangermoose_2

Hi can anyone tell me when the best time to take a redundancy package after working for 30 years the factory I work in is closing we can take our redundancy any time
Is the best time after 5th April just when the next tax year begins so not to have any salary already earned and not pay too much at the 40% rate

Hope someone can help

getmore4less

Is the compensation package over £30k?

is there any taxable bits like PILON or holiday pay

in many cases the start of the tax year can be better but there are other factors depending on if you plan to go back to work or want to top up pensions.

getmore4less

booksurr wrote: »

it will only be effective in going on/after 6th April if you do not intend to have 1 penny more of income for the rest of that tax year otherwise anything you subsequently earn in a new job (if you want/get one) will be taxed at 40% as you will already be over the threshold for that year

How can you say that without knowing the package?

to start paying tax on new earnings at 40% it would need to be over £70k(ish)

Dangermoose_2

The package will be roughly 65k

getmore4less

when you say anytime there must be a cutoff

are you planning to get new work.

Do the calculations between taking it now-4 April and taking it after with earnings for the new tax year

Dangermoose_2

The cut off could be up to Feb next year when we are told they are closing
Would be thinking of looking for employment but there's not much out there

xylophone

How old are you? Are you considering a pension contribution?

kidmugsy

How much of the package is redundancy pay, and how much is PILON etc?

When is your next birthday, and how old will you be? What's your income been so far this tax year? What will it be this tax year if you don't leave until after 5/4/16?

getmore4less

Dangermoose wrote: »

The cut off could be up to Feb next year when we are told they are closing
Would be thinking of looking for employment but there's not much out there

Can't see any reason to take it this tax year.

I would carry on working if you need/want another job.

As long as you get £30k tax free you can earn close to £8k before 40% tax kicks in even then that's likely better than JSA.

If they are flexible you could keep working and leave when you find something else. Meantime look at pension contributions to reduce taxable pay.

getmore4less

There is the risk they change their minds. Depends how sure you are it's a done deal.

chrismac1

The ideal time is now IF your employer is willing to split the payoff, so that some of it is paid in 2015-16 tax year and some in 2016-17.