Can I claim back tax on redundancy payment before the end of the tax year?

Starky04

I found out today that I will be made redundant.

Around £25,000 of my redundancy package will be subject to tax and NI. It will be paid on July 25th.

This has been quite sudden so I don't have a new job lined up. I am considering taking some time off as I've been working flat out for the last 5 years.

I am conscious that I will be hit with a massive whack of tax on July 25th. If I do not work for the rest of the tax year then I will have seriously overpaid. Is there any way to avoid the overpayment or claim back tax early? It would be useful to have that money locked away in a savings account.

[Deleted User]

All here:

https://www.gov.uk/guidance/claim-back-income-tax-when-youve-stopped-working

Green_hopeful

You can claim it back as Ferro suggests. It took about three months for mine to come back last year. If you have some spare it might be worth putting some of it into your pension to get a tax rebate. If you need to contact HMRC for an update you can get through to a human on the chat bot by typing adviser repeatedly. You need your name address date of birth and National Insurance number so have that handy. They will then tell you the likely timescale. I think they were a bit optimistic when I did it. If you are still not working by the next tax year HMRC will calculate your tax code based on your income this year which obviously includes a termination payment. I have tried to resolve this but it seems this is not possible. Hey ho. 

Dazed_and_C0nfused

Green_hopeful said:

You can claim it back as Ferro suggests. It took about three months for mine to come back last year. If you have some spare it might be worth putting some of it into your pension to get a tax rebate. If you need to contact HMRC for an update you can get through to a human on the chat bot by typing adviser repeatedly. You need your name address date of birth and National Insurance number so have that handy. They will then tell you the likely timescale. I think they were a bit optimistic when I did it. If you are still not working by the next tax year HMRC will calculate your tax code based on your income this year which obviously includes a termination payment. I have tried to resolve this but it seems this is not possible. Hey ho. 

You can definitely update your expected earnings on your Personal Tax Account.

Green_hopeful

Dazed_and_C0nfused said:

Green_hopeful said:

You can claim it back as Ferro suggests. It took about three months for mine to come back last year. If you have some spare it might be worth putting some of it into your pension to get a tax rebate. If you need to contact HMRC for an update you can get through to a human on the chat bot by typing adviser repeatedly. You need your name address date of birth and National Insurance number so have that handy. They will then tell you the likely timescale. I think they were a bit optimistic when I did it. If you are still not working by the next tax year HMRC will calculate your tax code based on your income this year which obviously includes a termination payment. I have tried to resolve this but it seems this is not possible. Hey ho. 

You can definitely update your expected earnings on your Personal Tax Account.

I will try but I chatted with a human a few weeks ago and she said no. Maybe it is because I don’t have to do a self assessment because I was PAYE and this year I will only be taking my pension from October. 

[Deleted User]

Green_hopeful said:

Dazed_and_C0nfused said:

Green_hopeful said:

You can claim it back as Ferro suggests. It took about three months for mine to come back last year. If you have some spare it might be worth putting some of it into your pension to get a tax rebate. If you need to contact HMRC for an update you can get through to a human on the chat bot by typing adviser repeatedly. You need your name address date of birth and National Insurance number so have that handy. They will then tell you the likely timescale. I think they were a bit optimistic when I did it. If you are still not working by the next tax year HMRC will calculate your tax code based on your income this year which obviously includes a termination payment. I have tried to resolve this but it seems this is not possible. Hey ho. 

You can definitely update your expected earnings on your Personal Tax Account.

I will try but I chatted with a human a few weeks ago and she said no. Maybe it is because I don’t have to do a self assessment because I was PAYE and this year I will only be taking my pension from October. 

You didn’t mention that you were taking a pension later this tax year. That changes things significantly. I would not be completing a P50.

Green_hopeful

It’s ok I was dismissed last year. So my reclaim was last year. Don’t want to hi jack someone else’s thread. 

[Deleted User]

Green_hopeful said:

It’s ok I was dismissed last year. So my reclaim was last year. Don’t want to hi jack someone else’s thread. 

Yep - I confused you with the op