Redundancy pay and self assessment

scar1_2

Hi,

I am hoping someone with a bit more tax savvy can help me here. My friend was made redundant August 2015 last year and just after taking redundancy they ventured on a self employment franchise. They registered themselves as self employed from the 14th of August 2015 however the redundancy pay from previous job did not come through until September 2015.

My friend is no longer undertaking the self employed franchise and actually has another job however needs to complete a self assessment. for tax year 2015/16.

The question is given that the redundancy was actually received during the period when he was registered as self employed, does he need to declare the redundancy within the self assessment?

Technically I do not believe she should be taxed on this however concerned that she does not declare it could be seen as fraudulent. At the same time do not want to invite tax payment against earnings that are in fact tax free.

Any advice is much appreciated.

Thanks
Scar1

Kynthia

Was tge redundancy amount all pure redundancy, no PILON or other payments, and was it over or under £30k? Up to £30k is tax free.

The Cutting Tax board might be a good place to double check this.

Dazed_and_confused

Your friend needs to realise that a self assessment return is for a specific tax YEAR and all taxable income needs to be declared so they would be including details of the pay (and any tax paid) from the company which made him redundant and any other income he had in the 2015:16 tax year.

Self assessment is not just for self employed income but all taxable income.

Redundancy payment itself will depend on the specifics relating to your friend.