How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Tony Tax Your Own Question

Tony Tax
Tony Tax, Tax Consultant
Category: UK Tax
Satisfied Customers: 14150
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
13905389
Type Your UK Tax Question Here...
Tony Tax is online now
A new question is answered every 9 seconds

Good morning. I have been made redundant with a £90,000 redundancy

Resolved Question:

Good morning. I have been made redundant with a £90,000 redundancy package. They have paid this amount to me for this tax year at my request. This was done because last year my earninigs were £120,000 and I didn't want to go into the 50% tax bracket.
But the net figure looks low to me. I have checked with my financial advisor and their figure is a few thousand higher that what I received.
What do you think the net figure should be?
Thank you very much.
Submitted: 2 years ago.
Category: UK Tax
Expert:  Tony Tax replied 2 years ago.
Hi.

Was the redundancy payment made to you after you had left your employer? When exactly was it paid? How much tax has been deducted? What was your official leaving date? Do you have a P45 for the payment with a tax code on it? If so, what is the tax code?
Customer: replied 2 years ago.

Hi,

 

Paid on the 3rd April

What hit my account is

Holiday Pay = £2,769.24
Compensation Tax free = £30,000
Compensation Taxable = £30,000
Payment in lieu of Notice = £30,000

PAYE = (£29,561.66)
NI = (£933.30)

Net Pay = £62,274.28
Paid as £60,974.16 + £1,300.12

The Tax is based on a Month 1 Code ie post P45

Official leaving date 31/3

P45 not received yet

Expert:  Tony Tax replied 2 years ago.
If your official leaving date was 31 March, then the redundancy pay should be taxable in 2011/12 and the tax office will query any claim that it is taxable in 2012/13.

Post P45 redundancy payments are subject to a tax code of 0T Month 1. What this means is that the first £2,916 of the taxable element is taxed at 20%, the next £9,583 is taxed at 40% and the balance at 50%. This treatment was introduced on 6 April 2011 as prior to that post P45 payments were only taxed at 20% and employers were not warning ex-employees that they may have further tax to pay. You can make a claim for the excess tax to be repaid to you by completing a tax return or sending your P45 to the tax office.

Let me know if you have any further queries.
Tony Tax, Tax Consultant
Category: UK Tax
Satisfied Customers: 14150
Experience: Inc Tax, CGT, Corp Tax, IHT, VAT.
Tony Tax and other UK Tax Specialists are ready to help you

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
< Last | Next >
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
  • I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight. Bonnie Chesnee, SC
  • Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation. John Minneapolis, MN
  • Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. Orville Hesperia, California
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA
 
 
 

Meet The Experts:

 
 
 
  • Andrew Baker(baktax)

    Personal Tax Adviser

    Satisfied Customers:

    756
    35+ years experience in income tax, CGT, non-residence
< Last | Next >
  • http://ww2.justanswer.com/uploads/baktax/2009-7-15_202414_Frame.jpg Andrew Baker(baktax)'s Avatar

    Andrew Baker(baktax)

    Personal Tax Adviser

    Satisfied Customers:

    756
    35+ years experience in income tax, CGT, non-residence
  • http://ww2.justanswer.com/uploads/teap007/2009-01-10_145815_bill_justanswer_for_profile.jpg TEAP007's Avatar

    TEAP007

    Tax Preparer

    Satisfied Customers:

    754
    Fully Trained Inspector of Taxes / District Inspector/ Team Leader/ Offshore Consultant/ 41 years
  • http://ww2.justanswer.com/uploads/BE/berduchwal/2011-6-7_84817_pict0854.64x64.jpg berduchwal's Avatar

    berduchwal

    Accountant

    Satisfied Customers:

    669
    Qualified accountant and bookkeeper running my own practice since 2008.
  • http://ww2.justanswer.com/uploads/JO/Josh2010/2012-4-29_19490_GettyImages80121770B.64x64.jpg Joshua's Avatar

    Joshua

    Lawyer

    Satisfied Customers:

    61
    LL.B (Hons), Higher Prof. Dip. Law & Practice
  • http://ww2.justanswer.com/uploads/RO/Ronaann/2012-3-19_23343_SSL22629.64x64.JPG Mrs-Tax's Avatar

    Mrs-Tax

    Tax Adviser

    Satisfied Customers:

    59
    Law Degree, 19 years in UK Tax.
  • http://ww2.justanswer.com/uploads/TG/TGraham12/2012-7-17_81212_bigstockBusinessHandshake508163.64x64.jpg Thomas's Avatar

    Thomas

    Solicitor

    Satisfied Customers:

    48
    Exposure to general tax issues
  • http://ww2.justanswer.com/uploads/struppiaml/2009-10-9_95150_anthony_business_002.jpg AnthonyL's Avatar

    AnthonyL

    Tax Adviser

    Satisfied Customers:

    19
    ATT, ATII, 12 years tax experience