Severance due to ill health
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Alisonfs72
Posts: 2 Newbie
Hi,
My husband is too ill to work and after 15 months is being let go by his employer. His sick pay ran out last year and we are on UC.
What tax will he pay on any severance pay? There will be a lump sum that includes 2 weeks wages and 29 days holiday he is owing. Assuming it will go through PAYE as wages? I think normal 20% but hubby thinks 40% because it's nearly £4000?
We know it will affect the following months UC which we will save from the final payment.
Thanks
My husband is too ill to work and after 15 months is being let go by his employer. His sick pay ran out last year and we are on UC.
What tax will he pay on any severance pay? There will be a lump sum that includes 2 weeks wages and 29 days holiday he is owing. Assuming it will go through PAYE as wages? I think normal 20% but hubby thinks 40% because it's nearly £4000?
We know it will affect the following months UC which we will save from the final payment.
Thanks
0
Comments
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Severance pay isn't taxable at low levels, but holidays don't count as severance pay, and are taxable. The other two weeks - depends whether it is formal severance pay, or just two weeks pay that is due (like in lieu of notice) as to whether or not it is taxable. Either way, it would only be taxable at lower level, once personal allowance is used on PAYE.0
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How long has he worked there.
What is his notice period in his contract
A week or a month.
Something doesnt feel right reallymake the most of it, we are only here for the weekend.
and we will never, ever return.0 -
He has been there 2 years without a break in service....was 6 years but he left for another company and went back after 2 months so break in service. His pay will be 29 days holiday plus 2 weeks pilon.0
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