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Redundancy tax-next job income tax
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Livvycw
Posts: 1 Newbie
Just wondering if anybody could point me to the right information ... my other half is due to be made redundant probably in April/May..
His redundancy pay will be made up of 30000 tax free then another 28000 on top of that which will be high rate (?) (and then another 7000 which will be payment in lieu of notice but I know that 7000 will be taxed and insurance as normal pay)
My question i cant find an answer for is...
If he gets another job in the same tax year as redundancy is paid, will that 28000 be classed as earned taxable income before his new job income?
So 28k already taxable pay....plus the pay inlieu of notice 7k ...and say another job earning say 20k in same tax year... that would push him over into high rate tax on the new job for that same tax year.... in which case i am thinking would he be better to just take 6 months break between jobs... ?? To avoid the high rate tax ... (i know he would be earning something if he went straight into another job but some extra family time would be worth more than the income after the 40% tax for us)
Or would his new job income tax get calculated without taking into consideration the extra 28k redundancy pay... ?? Hope i have explained that ok.
My first question to his current employer will be to see if he can get the 28k paid straight into his pension...
Many thanks
His redundancy pay will be made up of 30000 tax free then another 28000 on top of that which will be high rate (?) (and then another 7000 which will be payment in lieu of notice but I know that 7000 will be taxed and insurance as normal pay)
My question i cant find an answer for is...
If he gets another job in the same tax year as redundancy is paid, will that 28000 be classed as earned taxable income before his new job income?
So 28k already taxable pay....plus the pay inlieu of notice 7k ...and say another job earning say 20k in same tax year... that would push him over into high rate tax on the new job for that same tax year.... in which case i am thinking would he be better to just take 6 months break between jobs... ?? To avoid the high rate tax ... (i know he would be earning something if he went straight into another job but some extra family time would be worth more than the income after the 40% tax for us)
Or would his new job income tax get calculated without taking into consideration the extra 28k redundancy pay... ?? Hope i have explained that ok.
My first question to his current employer will be to see if he can get the 28k paid straight into his pension...
Many thanks
0
Comments
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It's only anything above the 40% higher rate that would be at that rate, not all his earnings.0
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Or shove some of his earnings from the new job in to a pension to bring him under higher rate threshold.0
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