Second time redundancy same employer no tax free cash

79Belle0910

I hope someone can help.  Im in the process of being made redundant from the same employer for the second time.  I was previously made redundant just over 16 years ago and returned after 3 years and have been back 13 years.  I have been told that my £30k tax free cash allowance is impacted so i will essentially not get this second time round.  I was really shocked and disappointed as this impacts heavily on my redundancy payment and my plans i had to travel after with the funds.  Ive searched on HMRC form spoken to them although they said it was an employer issue and nothing to do with them and spoke to someone in tax who thought the redundancy tax free cash should be per termination.  There was nothing in my contract to suggest this when i returned.  Can anyone help advise me.?

RogerPensionGuy

IIRC I thought a person could only every receive a maximum 30K cash tax free from redundancy in their life. 

IIRC, people who go over 30K often plonk it in a pension.

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https://www.moneyhelper.org.uk/en/pensions-and-retirement/pension-problems/your-pension-options-if-you-re-made-redundant#:~:text=allowances for pensions.-,Consider getting financial advice,guide Choosing a financial adviser.

79Belle0910

Wasnt aware that £30k was a lifetime thing at all and cant see that being referred to anywhere. i know i can pay into a pension and i will but i didnt want to do that with most of the funds. Thanks tho

chrisbur

It looks like the tax free £30000 is per employer.  An example is given here a little way down the page so would appear that if the full £30000 tax free was applied first time then no more tax free but if only some of the £30000 tax free was used the remainder should be tax free as in the example.

https://www.litrg.org.uk/working/employment/leaving-job/redundancy#3

kempiejon

RogerPensionGuy said:

IIRC I thought a person could only every receive a maximum 30K cash tax free from redundancy in their life. 

IIRC, people who go over 30K often plonk it in a pension.

***

https://www.moneyhelper.org.uk/en/pensions-and-retirement/pension-problems/your-pension-options-if-you-re-made-redundant#:~:text=allowances for pensions.-,Consider getting financial advice,guide Choosing a financial adviser.

Hmmm, I have been made redundant 3 times and remember that on 2 of them for sure I was given compensation that wasn't taxed. I'm pretty sure I have had more than £30k but haven't kept records

79Belle0910

@chrisbur thanks for sharing that. these examples do help albeit there all just a few years apart. 15 years seems along time to have same tax position applied and highly unfair but that life i guess

R20223

was made redundant twice by same company once after 20 years and again after 18 years got 30k tax free both times
the company had name changes over that time  never heard of it only applying once  

chrisbur

R20223 said:

the company had name changes over that time 

That is probably why HMRC did not pick it up.

79Belle0910

@chris buchrisbur said:

R20223 said:

the company had name changes over that time 

That is probably why HMRC did not pick it up.

@chrisbur HMRC say they just deal with what they are given its an employer issue and nothing to do with them. Thats what i was told i cant find any HMRC guidance on this bar a few responses on forums

Andy_L

https://www.legislation.gov.uk/ukpga/2003/1/section/404

404 How the £30,000 threshold applies

(1)For the purpose of the £30,000 threshold in section 403(4) and (5), the payments and other benefits provided in respect of an employee or former employee which are to be aggregated are those provided—

(a)in respect of the same employment,

(b)in respect of different employments with the same employer, and

(c)in respect of employments with employers who are associated.

penners324

RogerPensionGuy said:

IIRC I thought a person could only every receive a maximum 30K cash tax free from redundancy in their life. 

IIRC, people who go over 30K often plonk it in a pension.

***

https://www.moneyhelper.org.uk/en/pensions-and-retirement/pension-problems/your-pension-options-if-you-re-made-redundant#:~:text=allowances for pensions.-,Consider getting financial advice,guide Choosing a financial adviser.

Definitely not correct.