We're aware that some users are experiencing technical issues which the team are working to resolve. See the Community Noticeboard for more info. Thank you for your patience.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!

Tax on redundancy payment

Options
Hi, I’m being made redundant in March 2020 and will get my payment on 19th April. I’m getting about £61,000, I know that £30,000 of that will be tax free but what will I be taxed on the remaining amount? As it will be the new tax year will it be 20% or 40%?
I’m confused and would be very grateful if someone has any knowledge of tax.

Comments

  • BoGoF
    BoGoF Posts: 7,098 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    Depends what tax code is used. You will basically have £31,000 of taxable income in month 1 of the tax yea so likely to be a combination of 20, 40 and 45 per cent as the annual equivalent of that takes you into the 45% bracket.

    Do you intend seeking new employment?
  • Hopefully I will be able to find a job 🤞🏻
  • BoGoF
    BoGoF Posts: 7,098 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    Rubyroo765 wrote: »
    Hopefully I will be able to find a job 🤞🏻

    In that case your tax position will sort itself out if you give new employer your P45.
  • kev2009
    kev2009 Posts: 1,107 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    Hi,

    Perhaps put some into your pension to lower the tax you will pay, if you haven't used your full allowance and don't need they money now?

    Kev
  • That is an option the company has offered me so will look into it.
  • You'll possibly have around £13,650 deducted in April for Tax and NIC, but depending on when you start work again/what those earnings are you may find yourself paying less tax each month than normal for the rest of the year as your tax code will adjust things so it all balances by the year end.
This discussion has been closed.
Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 350.9K Banking & Borrowing
  • 253.1K Reduce Debt & Boost Income
  • 453.5K Spending & Discounts
  • 243.9K Work, Benefits & Business
  • 598.8K Mortgages, Homes & Bills
  • 176.9K Life & Family
  • 257.2K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16.1K Discuss & Feedback
  • 37.6K Read-Only Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.