Redundancy and avoiding tax

kevkj

Hi i hope some Guru can help me .

I a thinking of taking redundancy at Xmas 2017.

My salary is £43,800

I have worked for the company for 37 years and the figure is expected to be £54,000 including 90 days lieu.

Obviously i can take £30,000 tax free .

By Xmas i would have expected to have earned around £33,00.

After taking the £30K tax free then the other £24,000 would be taxable at i assume 40%.Which would be around 10k to the tax man

I have a works pension that i pay 9% of my salary into.

Has anyone any advise how to lower this taxable figure.

Could i put a lump sum into a pension ,if so how much?

Is opening a SIPP an advantage.

Hopefully someone can assist me.

Masomnia

Paying a !!!! load into your pension seems the obvious choice.

This isn't the best forum to ask on though. Maybe Cutting Tax or Saving and Investments.

getmore4less

40% tax does not kick in till £45k.

kevkj

GEtmore problem is i will have earned 33K this tax year then get 54 K

getmore4less

After taking the £30K tax free then the other £24,000 would be taxable at i assume 40%.Which would be around 10k to the tax man

First £12(ish) of that would be at 20% that £10k is down to £7200 already

chances are the PILON will be taxable income not compensation if the company are saying it is not taxable make sure you get them to say they will pay any tax/NI if HMRC decide otherwise..


if company will go for massive salary sacrifice into pension now and you can afford the cash flow you could also save some NI(12%)for 6 months

Dazed_and_confused

Have replied on the Cutting Tax thread

Wookey

Those 90 days in lieu can they be worked? If so that's taking you very close to the end of the tax year, possible to end up being redundant into the start of the new tax year?

kevkj

I am in a Defined benefits workplace pension.

I also have a AVC with Provident Life with £2345 in that i have not contributed in since 2008.

It is very likely i am to be made redundant around October-Novemeber and will recieve £54,000 in total. Of which £30,000 will be tax free .

I wish to put the £24,000 taxable into my AVC but my company has a flex choice scheme that ties you in each year.
Mine currently says no AVC through the company until late November when the yearlyschemes review takes place.

Can my AVC provider arrange to take the monies £24,000 from my redundancy payment ? Can my company stop this and hence make the £24,000 taxable.

My salry is £43,800

Kynthia

kevkj wrote: »

I am in a Defined benefits workplace pension.

I also have a AVC with Provident Life with £2345 in that i have not contributed in since 2008.

It is very likely i am to be made redundant around October-Novemeber and will recieve £54,000 in total. Of which £30,000 will be tax free .

I wish to put the £24,000 taxable into my AVC but my company has a flex choice scheme that ties you in each year.
Mine currently says no AVC through the company until late November when the yearlyschemes review takes place.

Can my AVC provider arrange to take the monies £24,000 from my redundancy payment ? Can my company stop this and hence make the £24,000 taxable.

My salry is £43,800

Can you ring your pensions administrator to find out? The Civil Service Pension Scheme allows part of your redundancy to go straight into your pension and it's an option in the redundancy paperwork.

Alternatively many wait until they receive the redundancy money and then pay into a private pension or SIPP if tgey don't want it in their DB work scheme. The pension provider then adds back the 20% tax relief and you ring HMRC to get any further relief you might be due, either by a tax code change or a cheque if you aren't going to have any further income that year. Can you make direct payments to your ACC provider?

If you go on the Pensions board there are people that can help you.