Newbie Tax on redundancy question.

BlobCore

Hi folks, first post here but sure it won't be my last as I begin a new chapter in my life.

So I have a redundancy settlement figure on the table which could allow me to almost clear my mortgage. I juts need to calculate net value, my employer wont do this for me.

So I know the first £30k is tax free. On the rest of it is there a 20%, 40%, 45% band or does the £30k tax free replace the lower limit allowance?

Hope this makes sense and thanks for any help!

Masomnia

The £30k is in addition to the personal allowance, ie the £11k or so you get tax free if that's what you mean.

Pay in lieu of notice, holiday pay, commission etc will be taxable in any event.

BlobCore

Thanks. So effectively in the 19/20 tax year my tax free allowance will be £42500?

BoGoF

The tax rate applied to the taxable amount will depend on what other taxable income you have. If the payment is made early in the tax year and is significant it ia likely to attract a large tax liability and this may need to be reclaimed from HMRC.