Help on tax and redundancy

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.

Dazed_and_confused

Why do you think it would be taxable at 40% if your (actual) salary is only going to be £33,000?

Has anyone any advise how to lower this taxable figure
Realistically you're not going to be able to do anything to lower the taxable amount however what you can do is increase the amount you can pay 20% tax on.

If you contribute to a sipp then the amount gets basic rate tax relief added at source by the pension company and the gross amount increases your basic rate tax band. So a £10,000 payment into a sipp would be grossed up to £12,500 with basic rate tax relief so you have this in your pension fund and you can then claim higher rate tax relief from HMRC

The £12,500 increases the amount you pay 20% tax on from £33,500 (I'm assuming you don't live in Scotland) to £46,000 plus you have your £11,500 personal allowance so a total of £57,500 before you have any 40% tax to pay.

Any tax refund you get from the pension tax relief is comes back to you, it doesn't get added to your pension fund (though you may be able to use some of the money to make extra payments to your sipp).

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 yearMine currently says no AVC through the company until November.

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 salary is £43,800

xylophone

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