How will my redundancy affect tax on a new job

JimmyRowell

I’m about to be made redundant, when I receive my payout I will be pushed into the 40% tax bracket and I’m unsure what this will mean for my next job. I’ll be moving into a job on around £25k a year and want to know if this means I’ll be paying 40% tax on everything above my personal allowance. Any help?

lulu650

The first £30,000 of redundancy pay is tax free.

JimmyRowell

With my earnings to date and redundancy package my total taxable pay will be £47000 YTD thats in top of the £30k tax free

Kynthia

JimmyRowell wrote: »

With my earnings to date and redundancy package my total taxable pay will be £47000 YTD thats in top of the £30k tax free

How have you calculated that? Have you used your p45 figure and added it to your pro-rata new salary? Have you removed pre-tax deductions you will have like pension, NI, and any salary sacrifice items like childcare vouchers or the cycle to work scheme?

getmore4less

If you gross taxable pay to date with redundancy(over£30k) is £47k then ALL future income will effectively be at 40%.

You should have overpaid on the dedundancy so some of the tax will have already been paid.
The first few months will be zero/low tax till you use up the overpayments