Large amount of income reported by me previous employer

Treehoger1

Hi, hope you can advise me.

I left my employer at the end of March this year. Looking at my HMRC account PAYE section, there is a large amount of income reported by the former employer.

I haven't received any income from them for this year, but I did have their shares scheme. I was saving to this scheme for many years and had to cash them after leaving. I had lost a lot of company contribution shares and had to pay tax on it. 

Is this now part of my income for this tax year? I hope it shouldn't be a case, as it will put me in the higher tax bracket, unless I put more into pension, but I don't think I can afford it. 

Thank you

Flugelhorn

did you have any annual leave that you had not taken? 

Treehoger1

Yes, I did, but this was a very fraction of the amount, less than 300

Flugelhorn

I think you need to speak to their payroll dept - they should be able to explain it 

Treehoger1

Thank you for your response, I emailed them. Unfortunately it is a big corporation and there is nobody to speak to, just the HR emailed help for leavers. I will see if they respond and if not will try the office where payroll is. 
Is it worth calling HM revenue as well?

Dazed_and_C0nfused

Treehoger1 said:

Thank you for your response, I emailed them. Unfortunately it is a big corporation and there is nobody to speak to, just the HR emailed help for leavers. I will see if they respond and if not will try the office where payroll is. 
Is it worth calling HM revenue as well?

I wouldn't waste your time.  They will likely only know what you know, it's your ex employer who can explain what the payment relates to.

Treehoger1

If it does relate to cashed in shares from salary sacrifice that I was part of for five years. Does it mean it forms part of my income for this tax year?
I think it must be it, but it seems unfair.

MattMattMattUK

Treehoger1 said:

If it does relate to cashed in shares from salary sacrifice that I was part of for five years. Does it mean it forms part of my income for this tax year?

It would fall in the year you realised the income from the shares. Depending on the scheme there may be an income component, some may be capital gains etc. You really need to read the scheme information pack to find out exactly what and when things are going to be declared. 

Treehoger1 said:

I think it must be it, but it seems unfair.

Why is it unfair that you have to pay tax on an income or capital gain? 

Treehoger1

Not that, I paid tax already and lost company contributions as well. Unfair bit is that all suddenly fall within one tax year as an income, when I saved this over 5 years. So I understand, as part of salary sacrifice I wasn't taxed on my contributions for the scheme. But, when leaving the scheme, I paid that tax on it. I paid 31%. Now if it forms part of my income for this year, I will fall into higher bracket. 
So, if I was to make higher pension contributions this year to avoid being higher tax payer. For my adjusted net income, will I have to add income from current employment, holidays from last year that ex employer paid late (in April ) and then gross value of the salary sacrifice scheme, or deduct the 31% tax I already paid when cashed it?

Treehoger1

P.S. I don't even think I made a lot of profit on the shares rise, I wasn't even able to keep dividends. So the majority of tax I paid was really just to make up income tax I hadn't paid over the 5 years. Hope that makes sense.

MattMattMattUK

What was the minimum retention period for the shares? Why did you not plan for their disposal before leaving?