Redundancy lump sum tax brackets and reclaim?

Ababab55

Hi all.
hoping anyone would have knowledge and also to help explain to others as a lot of threads seems over complicated in explaining.

I was made redundant in Nov and was given pilon - paid in lieu- a lump some of 3 months salary.

I’m in the 40% bracket and a normal months pay would be subject to 3 elements.
a tax free, a 20% and a 40% tax charge.

So, 3 months lump sum should have 9 elements of the above for my Dec, Jan and Feb pay.

However it’s looks like it’s been calculated as 9 elements of;
 1 element at tax free, 1 element at 20% and 7 elements at 40%.

and it looks like Ive paid ~3.5k more than if I had received the lump sum over the 3 months.

Has anyone else claimed it back. If so how or is it automatically reconciled in April and I should expect a cheque?
Please and thanks 

A

chrisbur

What have you been doing since leaving that job?
If you are now working somewhere then your tax position will be sorted (if any adjust is needed) through your salary from your new employer.

EnPointe

Ababab55 said:

Hi all.
hoping anyone would have knowledge and also to help explain to others as a lot of threads seems over complicated in explaining.

I was made redundant in Nov and was given pilon - paid in lieu- a lump some of 3 months salary.

I’m in the 40% bracket and a normal months pay would be subject to 3 elements.
a tax free, a 20% and a 40% tax charge.

So, 3 months lump sum should have 9 elements of the above for my Dec, Jan and Feb pay.

However it’s looks like it’s been calculated as 9 elements of;
 1 element at tax free, 1 element at 20% and 7 elements at 40%.

and it looks like Ive paid ~3.5k more than if I had received the lump sum over the 3 months.

Has anyone else claimed it back. If so how or is it automatically reconciled in April and I should expect a cheque?
Please and thanks 

A

1. what are you currently doing employment wise ? 
2. what will your total taxable income be for the year ? 

Ababab55

Well I’m working now in March but last 3 months I was on JSA. How does my new job salary sort out the over payment issues in tax ? Future salary will still put me in the 49% tax bracket .

Sarahspangles

What tax code are you on for March?

If you haven’t already, sign up for an HMRC personal tax account so you can see what’s happening. If you’re taxed on a ‘Month 1’ basis in your new job then you will likely be owed some tax. Repayments via P800 for overpaid tax in 2023/24 were slow (just managing your expectations)

chrisbur

Ababab55 said:

Well I’m working now in March but last 3 months I was on JSA. How does my new job salary sort out the over payment issues in tax ? Future salary will still put me in the 49% tax bracket .

The P45 (P45U from Job Centre)  is the way that your tax position is sorted out.  Each change of job or unemployment gets taxable pay and tax details from the last in order to work out the new tax position.  Job Centres at one time used to pay tax rebates if due when you signed off but may well not do that now (bit out of the loop on that) however they do issue a P45U which when the system is working correctly would result in any tax adjustment needed being done by the new employer.  Problem is we are near the end of the tax year and sometimes things move slower than is ideal so could be that any adjustments will not be made this tax year and you will have to wait.
Have you received a P45U, did it have figures on Part 2 for earnings and tax, did you give this to new employer.