Any PAYE experts here ?

prowla

Musicwolf said:

ToneControl said:

they changed the rules recently:

https://www.personneltoday.com/hr/changes-payment-in-lieu-of-notice-tax/

It all depends whether your contract specified the PILON

Yes the rules changed fairly recently.  Also, I agree with the previous comments that HMRC likely extrapolated your last pay packet and taxed you accordingly.  It's reasonably easy to sort out but, if you do nothing, you should still get it back at the end of the tax year (or when you start work again).

I did have that at one point last year when I left a company with a nice bonus; the tax man decided I must be going to earn that every month and issued a tax code accordingly, so I had to get that straightened out.

siremoon

boogieman said:

siremoon said:

Also, and this may or may not be relevant in this case, only the first £30,000 of a redundancy payment is tax free.  Anything over that is taxed at the marginal rate.

I got over £30k as a leaving package but my company let me split it over two tax years. So I got £30k in the March and the balance paid after the new tax year. No tax, thank you very much. Depends how obliging your employer is and it all needs to be set up in advance of course. 

Well you should have paid tax on the second payment* because the redundancy payment £30,000 tax free allowance is per employment not per tax year. 

*Unless your total earnings (including the second redundancy payment) in the second tax year didn't exceed your personal allowance

boogieman

siremoon said:

boogieman said:

siremoon said:

Also, and this may or may not be relevant in this case, only the first £30,000 of a redundancy payment is tax free.  Anything over that is taxed at the marginal rate.

I got over £30k as a leaving package but my company let me split it over two tax years. So I got £30k in the March and the balance paid after the new tax year. No tax, thank you very much. Depends how obliging your employer is and it all needs to be set up in advance of course. 

Well you should have paid tax on the second payment* because the redundancy payment £30,000 tax free allowance is per employment not per tax year. 

*Unless your total earnings (including the second redundancy payment) in the second tax year didn't exceed your personal allowance

*Which they didn’t. I retired at that point and wasn't claiming my pension yet, so in effect I had no taxable income for a year or so. I’m aware of my obligation to pay and I’m not a tax dodger, I  just took advantage of what was on offer.  

grungebob

Emp_Fab said:

prowla said:

rlw said:

Im surprised that the payment in lieu was taxable as that wasn’t always so.
As said above, depending upon the sum involved, you could have been taxed at 45% with no task allowance at all.

PILON is taxable, but the redundancy payment isn't (subject to limits).

These days many companies will only do the statutory minimum redundancy, which is only equivalent to around a couple of months pay, so if you got more than that, you've done well.

I took redundancy from a company who wanted to change my job; since they gave me the option I said no thanks and TBH my 3 months notice was more money than the redundancy.

One thing to check is the pension contributions and other benefits are covered through to the correct date; I had to do some reading up on the government site.

Looks like you'll be needing to do a Tax Return at the end of the year.

Mine was the legal minimum.  What do you mean ‘the pension contributions and other benefits are covered through to the correct date’?.  Could you expand on that please ?

All your benefits like company car, company pension contributions should remain in effect until the end of any notice period you would have been held to. 
They’ve decided to not ask you to work your notice but this doesn’t mean they aren’t still liable to provide the benefits you were entitled to until such time your notice period expires. 

Emp_Fab

Ah.. I see,  Yeah, they've paid me for the loss of the car, something towards the pension (but I have no idea if it's correct) plus compensation for my untaken annual leave.  Thanks for the input guys - much appreciated.

octatonic

Emp_Fab said:

Ah.. I see,  Yeah, they've paid me for the loss of the car, something towards the pension (but I have no idea if it's correct) plus compensation for my untaken annual leave.  Thanks for the input guys - much appreciated.

Lemmy a fiver?

Emp_Fab