|"Independent Redundancy Help" - Established since 2000
Redundancy payments up to £30,000 in the course of working for any one company are normally free of tax. Anything above £30,000 is taxed at your highest rate.
When you are made redundant your employer should give you a P45 form. Give this to the benefits office or your next employer.
WITH RESPECT TO LUMP SUMS AND COMPENSATION PAYMENTS
Jobseeker's Allowance replaced Unemployment Benefit and Income
Support for unemployed people in October 1996. Unemployed people
can claim this allowance for themselves and one adult dependent.
This allowance is a taxable income.
You can not claim a PAYE tax refund while you are claiming benefit. When you get a job, complete the form at the back of booklet ES40 (which gives details about signing on) and return it. The job centre will then give you a P45 for your new employer. If you have paid too much tax your new employer or your job centre will give you a refund.
For more information please click here
When your employment contract specifies any redundancy pay or benefits. If this is the case any benefits are taxable.
It may be possible to negotiate with your employer to made additional payments into your pension instead of making a redundancy payment. This will enhance your pension and help you avoid paying tax on those payments above £30,000!
Don't forget to hand over your P45! If you don't you will end up on an emergency tax band and pay extra tax until it is sorted out.
|Copyright © Program IT (UK) Ltd 2000 to 2015