redundancy 30 march but next tax year better.. can i change it?

elaneh · 10 December 2019 at 9:41PM

hi all
I would like to know if there is any way to persuade my employer to give me my redundancy payment in the next financial year --a week later that is.
a good number being made redundant and many of us would be better off tax wise if we got the payment in 20/21 tax year because it would be less tax to pay on it as wont be higher rate tax payers (redundancy payment pushes us into the highter bracket)

any advice to persuade the employer to change it? do they lose out?

thanks

McKneff · 10 December 2019 at 10:28PM

You dont pay tax on redundancy pay as far as i am aware
Well not the 1st 30k.

Tax is paid on other elements of course, holiday pay, wages in lieu of notice.

Dazed_and_confused · 10 December 2019 at 10:54PM

You do pay tax on redundancy pay. Possibly not all of it though.

Have you asked your employer when they intend to pay you? You may be worrying unnecessarily.

getmore4less · 11 December 2019 at 3:42AM

If you plan to work at the same/higher level of income it will just get you next tax year.

badmemory · 11 December 2019 at 5:55AM

They may well be amenable to changing the payment date but it may well depend on what the companies financial year is. If April - March you may well be out of luck. But if you don't ask you certainly won't get!

elaneh · 15 December 2019 at 8:48PM

thanks
their tax year ends on 30 march and they want all the redundancies on that date. we would pay less tax if made redundant a week later.. because then as we wont work again, we would have tax allowance and lower rate of tax
do you know if it would cost them money to move the date?

thanks

badmemory · 16 December 2019 at 2:08AM

If their tax year ends in March then it may well cost them more if it goes into their next tax year. But to save you tax personally the payment would have to be on or after 6th April. What you can get (which you won't if you don't ask obviously) depends on the "books" of the business. However there may be an element of take it whilst you can get it. Are they offering more than statutary redundancy? If not maybe a delay may be possible. Maybe you can ask for a stay whilst things are closing down. But you are not going to get it for all, well from what you say.

Remember the first £30k is not taxable. When does your holiday year go from/to.

lebowski1980 · 16 December 2019 at 12:15PM

badmemory wrote: »

If their tax year ends in March then it may well cost them more if it goes into their next tax year. But to save you tax personally the payment would have to be on or after 6th April. What you can get (which you won't if you don't ask obviously) depends on the "books" of the business. However there may be an element of take it whilst you can get it. Are they offering more than statutary redundancy? If not maybe a delay may be possible. Maybe you can ask for a stay whilst things are closing down. But you are not going to get it for all, well from what you say.

Remember the first £30k is not taxable. When does your holiday year go from/to.

By cost them more, are you referrring to the cash transaction or just the book transaction.

From a year end perspective, is this something that the company could accrue on the books to get it in to the year end numbers, but then paid on/after 6th April?

davidwatts · 16 December 2019 at 9:22PM

Just wack anything over £30k into your pension! Simple.

(Subject to annual and lifetime allowance considerations of course.)

Certainly a viable option for minimising tax impact.

elaneh · 20 December 2019 at 1:44AM

lebowski1980 wrote: »

By cost them more, are you referrring to the cash transaction or just the book transaction.

From a year end perspective, is this something that the company could accrue on the books to get it in to the year end numbers, but then paid on/after 6th April?

Am going to ask that

redundancy 30 march but next tax year better.. can i change it?

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