Redundancy +Tax +Pilon Questions

Skinnydad

Just been made redundant.. 30K tax free, I opted to put 32K into my pension this reduced my TFLS to 22K and all other payments Pilon etc was taxed is this correct? I believe I was taxed at 40%. I don't work for the rest of the year will I be due a tax rebate as I've never paid 40% in my life?

Thanks in advance..

zagfles

What do you mean it reduced your TFLS to £22k? This doesn't make sense on its own.

How much was your redundancy, PILON etc? How much did you earn before redundancy? How and what kind of pension did you put it into? Eg did you "sacrifice" it into your workplace pension or did you put it into a personal pension?

Skinnydad

My redundancy was 79K and I opted to put 32K into my pension. I thought that I'd get 30K tax free. however my base redundancy was 54K and the rest was PILON and other payments they owed me. so they said that my pension came of first therefore 32K was taken off and this left 22K tax free (54K) not 30K as I expected. so everything else was taxed hence the 9K tax bill.. HR said all other payments PILON, holiday pay etc are taxable. I just want to know this is the case?

Peelerfart

To answer the latter part, you probably will get a tax rebate.

Don't hold your breath though. I paid 40% tax for the first time when I was made redundant June 17.
Wasn't sorted until January,

Skinnydad

Thanks Peelerfart

zagfles

HR have screwed up as they should have taken the pension payment off your taxable redundancy/PILON etc, not the tax free part. If you get another job or are taking a pension, your PAYE details should carry forwards to that if you send/give them your P45, and the tax should be sorted out in your new job/pension. You'll probably have negative tax (ie rebates) for the next few months.

Skinnydad

do I need to contact HMRC to obtain a refund or is this done automatically through the PAYE system?

AnotherJoe

It can't be dealt with through PAYE if you aren't Earning.

So contact them.

rpc

It might also be worth looking into whether your PILON was properly taxable. It isn't always (depends if it is a contractual entitlement or damages for breach of contract).

zagfles

Skinnydad wrote: »

do I need to contact HMRC to obtain a refund or is this done automatically through the PAYE system?

Like I said "If you get another job or are taking a pension, your PAYE details should carry forwards to that if you send/give them your P45, and the tax should be sorted out in your new job/pension."


If you're not going to have any more earnings or pension income this tax year then contact HMRC.