Retiring after redundancy - contact HMRC?

BillyT57

Hi. I've searched but still not clear.

 this makes sense.

Background -I'm 67 and I've been a 40% tax payer for a long time now. Reduced my working week to four days a week in January to ease off before retirement.Salary now is £44400 plus £4320 car allowance per annum. I was planning to work until I was 70 when my wife, who worked in a school,  would have retired. Then we could take advantage of in-term time holidays.  Unfortunately, life had other ideas and in January my wife passed away. I decided then that the latest I would work was next April when I reached 68. I was made redundant last week and will receive PILON. So I've decided that's the push to retire now. I'll take some time out then I have a volunteering role lined up already.

Sorry, waffling over. I will receive my final salary/redundancy payment next week. I won't reach the 40% amount this tax year. Do I contact HMRC to advise them of my status.

I will have earned £12,180 salary this tax year, to end of June. Then £7350 tax-free PILON and £10,500 salary. I claim state pension which is £11,800 per year and I get another £2000 per year from my wife's pension. Should I expect car allowance for my notice period as well as salary? 

I think I can claim the difference in tax between 20% and 40% on my income this year but not sure how I sort it. Or do I need to wait for HMRC/ end of year?

Sarahspangles

I’m sorry to hear about your loss, it sounds healthy to be planning some voluntary work.

HMRC routinely finalises tax accounts for the prior tax year over the summer, but in your case I think notices from your employer or pension provider - do you have a personal pension commencing? - may trigger issue of a revised notice of [personal tax allowance] coding. You have one for non-State pensions. 

if you have or can set up access to your personal tax account (via the HMRC app) you can see what they know. If they currently show your former employment as a continuing income, you can revise that.

It sounds like you’re in receipt of full State Pension, but members of this board can ch3ck in case you can improve on that, the information is also via the HMRC app.

Sarahspangles

@BillyT57 By the way, if you post on the Pension, Annuities and Retirement Planning board, they’re quite active, just mention you’ve also posted here. The only ‘off topic’ bit is about the car allowance and they may know about that too, as many have gone from redundancy to retirement too.

Browntoa

From memory I had to ring HMRC and they sent me something to fill out and sign 

I'd had my redundancy paid over 2 tax years , end of march one part and then mid April for the remainder. They taxed me at higher rate on the 2nd payment but refunded the difference as I was in your situation and retired at the same time