Brian Whittaker's Tache Posted February 25, 2009 Share Posted February 25, 2009 I need a bit of solid advice from an accountant or someone who knows about tax I got "dismissed" from my job recently (as posted previously) As my contract stipulated a 3 month notice period, I (after a bit of a legal battle) got three months wages. When I was made redundant last recession I got wages in lieu of notice and it was tax free (unearned income or something?) This time I got battered for tax to the tune of about ?2500 Is this right? I think I'm being shafted one last time from my former employer. Also I got no break down when I got my settlement, I take it i'm legally entitled to one? Link to comment Share on other sites More sharing options...
Cow Posted February 25, 2009 Share Posted February 25, 2009 I need a bit of solid advice from an accountant or someone who knows about tax I got "dismissed" from my job recently (as posted previously) As my contract stipulated a 3 month notice period, I (after a bit of a legal battle) got three months wages. When I was made redundant last recession I got wages in lieu of notice and it was tax free (unearned income or something?) This time I got battered for tax to the tune of about ?2500 Is this right? I think I'm being shafted one last time from my former employer. Also I got no break down when I got my settlement, I take it i'm legally entitled to one? Insist on your final wage slip , that will tell you your tax and NI contributions and you should get a P45 with the amount of tax and NI you have paid since April 08. I know this sounds a bit simple but it really is. You can go online to inland revenue.gov and check your payments are correct with their online calculator. Link to comment Share on other sites More sharing options...
Sawdust Caesar Posted February 25, 2009 Share Posted February 25, 2009 Redundancy packages are tax-free (up to a certain amount) but pay in lieu isn't. Getting 3 months pay in one month will raise your taxable income quite high for that tax month and you will suffer quite a bit of tax. When you get your P45 and take it to your new employer you will get some tax back if there has been a gap between jobs. Or you will be able to claim some of it back at the end of the tax year if you don't get a new job. Or something like that. I'm a bit rusty on the tax rules so don't take my word as final. Link to comment Share on other sites More sharing options...
Victorian Posted February 25, 2009 Share Posted February 25, 2009 Redundancy packages are tax-free (up to a certain amount) but pay in lieu isn't. Getting 3 months pay in one month will raise your taxable income quite high for that tax month and you will suffer quite a bit of tax. When you get your P45 and take it to your new employer you will get some tax back if there has been a gap between jobs. Or you will be able to claim some of it back at the end of the tax year if you don't get a new job. Or something like that. I'm a bit rusty on the tax rules so don't take my word as final. if he isn't going to earn or claim benefit between now and april 5 then he can claim a cessation repayment from HMRC, there's a simple form to fill in and post off with the P45. if he is going to claim benefit then he can claim unemployment repayments periodically after each benefit payment (up to april 5). sounds like there will be a fair bit tax due back between now and april 5. OP - phone the revenue and ask them to send you whichever repayment claim form is valid. Link to comment Share on other sites More sharing options...
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