Redundancy payment and self assessment tax return

Hi all,

I was recently made redundant from a job with generous terms and a long service.

My usually salary is under the £100k pa level that triggers a self assessment tax return. But the additional taxable element of my redundancy has taken my taxable earnings over the £100k limit.

I’ve paid the tax at my higher rate and it’s been adjusted for the reduction in personal allowance over £100k by PAYE etc. So in short, all tax is paid correctly (I believe)

However, will I need to do a selfassement anyway? I have a new job now which once again isn’t going to take me above this limit this year and it was a one off due to redundancy.

Thanks for any advice.

Carl

Comments

  • Masomnia
    Masomnia Posts: 19,506
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    Check with HMRC. Unless anyone here has better ideas. I'd be shovelling it into a pension myself as you'll be clobbered by the reduction in your personal allowance as well as the tax.
    “I could see that, if not actually disgruntled, he was far from being gruntled.” - P.G. Wodehouse
  • Yes, in the circumstances described you will have to file a Self Assessment return.
    I’ve paid the tax at my higher rate and it’s been adjusted for the reduction in personal allowance over £100k by PAYE etc. So in short, all tax is paid correctly (I believe)

    I have to say this is highly unlikely to be true. If you have never previously earned at that level it would be unusual if your tax code took account of income over £100k. Unless maybe you updated HMRC yourself and asked for a new tax code whilst still employed?

    You may well have other taxable income, for example savings interest, and even if this is all due to be taxed at the savings nil rate of 0% (aka Personal Savings Allowance) it can still result in additional tax being payable overall, especially if your other income is in the £100k-£123k range.
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