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Redundancy
aphill24
Posts: 143 Forumite
in Cutting tax
Hi All,
Can anyone help in advising how my friend can avoid paying 40% tax on some of his redundancy which he will receive next year. It is very similar to my situation but I won't go into the differences now.
From April 2020 he will earn £24k up until the factory closes in September. He will also receive a redundancy payout of £137k. Total earnings £161k of which £30k will be tax free (redundancy)
With £131k being gross pay there are pension & NI contributions of roughly £3500 to come off leaving £127.5k I believe he will lose the £12500 tax free earnings allowance unless there is a way of putting more into a pension such as a stakeholder pension which he can access at age 55 he is 50yrs at the moment.
Can anyone help in advising how my friend can avoid paying 40% tax on some of his redundancy which he will receive next year. It is very similar to my situation but I won't go into the differences now.
From April 2020 he will earn £24k up until the factory closes in September. He will also receive a redundancy payout of £137k. Total earnings £161k of which £30k will be tax free (redundancy)
With £131k being gross pay there are pension & NI contributions of roughly £3500 to come off leaving £127.5k I believe he will lose the £12500 tax free earnings allowance unless there is a way of putting more into a pension such as a stakeholder pension which he can access at age 55 he is 50yrs at the moment.
0
Comments
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Think you can pay an amount equivalent to what your salary would be into a pension tax free, apart from that it's taxable ( as it should be ).0
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All £24k into pension before September. It depends when they are going to issue his P45.0
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