Redundancy Payment Timing

TEC6245

I am due to take VR and have been in talks with my employer about staying longer.. If I leave at the end of March 2021, then my payment will be made in next salary run which is mid-April.  Will this count as earnings in the 2021/22 tax year or fall into 2022/23?  Am worried that if all in this tax year I would lose a lot as it pushes my overall earnings into the next tax bracket.  Thanks for any assistance.

[Deleted User]

I believe that the first £30k is tax free - over that, yes you would need to think about which tax year is best for you

TEC6245

Thanks - and if that payment was made after April 4th would the amount over £30K be treated as earnings in 2022/3?

chrisbur

TEC6245 said:

Thanks - and if that payment was made after April 4th would the amount over £30K be treated as earnings in 2022/3?

April 5th is the last day of the tax year, new tax year starts on April 6th.  A salary run made mid-April would fall into the 22/23 tax year.