Redundancy and tax

First post.
I am fortunate to be taking voluntary redundancy in April as I was planning on taking early retirement at the end of the year. Trying to work out how best to take my redundancy lump sum and pension due to potential tax implications.
Tried contacting HMRC but.......
I will be taking my last salary at the end of April - approx 3k including bonuses etc.. - taxed as normal at 20% with part of this within my tax free allowance.
I will also receive a redundancy lump sum of £71k, 30k tax free and 41k taxable.
I will then have a pension beginning hopefully in May of around 750/mth.
My assumptions are:
1) April salary - taxable income around 2k
2) Redundancy payment of 41k will include a small amount payable at 40%. (I believe the Redundancy payment cannot take into account any of the tax free allowance so only 37,700 can be taxed at 20%, the rest will be at 40%).
3) All monthly pension payments will be within the monthly tax free allowance (1047.50) so will not be taxed.
4) Year end I may be due a tax rebate on the April taxable portion of my normal salary and potentially some of the 40% taxable portion of the redundancy payment rebated to 20% .

I am fortunate at age 57 never to have been made redundant before and I am obviously a novice in terms of tax so any help or clarification on this would be appreciated.

Many Thanks

Comments

  • molerat
    molerat Posts: 31,519
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    edited 8 March 2023 at 8:19PM
    If you give the P45 to your pension provider any overpaid tax will be paid back to you over the coming year.
    In April you will pay £18106 tax, some will be at 45%, in fact quite a sizeable chunk of it, due to the way PAYE works.
    In May your £750 pension will pay you £2106 due to £1356 tax being refunded
    The same in Jun & in Jul you will receive around £1200 tax refund
    Aug to Mar will see £779 tax refunded each month  meaning by the end of the tax year you will have paid the correct £7951 tax on your total taxable income of £52250, a couple of £K into the 40% band.
    All amounts just estimates but you get the picture :)
    And as an aside have you got a state pension forecast ?
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