PILON close to end of tax year

silverfox303

Hi
I'm being made redundant close to the end of the tax year - my "temination of employment" date may be end of Feb 2020.
I have a separate severance offer which uses up most of the £30k tax free amount and have an offer of PILON (3 months) on top.
My question is, as I am just sneaking into the 40% tax band, if my employer pays me my PILON at the end of Feb 2020 do I get taxed at 40% on the full amount (after NI) - ie it appears as a late income/"bonus" in 19/20. If so, that means the value of the PILON to me is much lower (poss by circa £3k).
If this is indeed the case, are there options I can pursue with my employer to effectively push part or all of my PILON into the 20/21 tax year. Would this mean a later "temination date" and I spend my notice period "on garden leave" or are there other options?
Due to health issues am I likely to be taking a couple of months out anyway so I'm less concerned about the chance of paying more tax in 20/21 by moving the payment into that year.
Thanks for any advice or directions to advice!
Silver

middleclassbutpoor

PILON is taxable and I think you would need to talk to an expert on whether technically the employer could delay payment to help minimise tax.

If you find that you cannot delay this, I would maybe consider looking in to whether you could ask them to make a payment into your pension with some of the money before the end of the tax year which may bring you back in line to not pay a higher rate of tax?

Masomnia

If it was done as garden leave they could spread out the payments. If you ask nicely I don't think there's any reason why they couldn't pay you a chunk this tax year and the rest next year, even if it's not garden leave; but happy to be corrected on that.

Alternatively bung it into your pension to escape the 40% band.