Double tax and pay in lieu of notice

[Greg Smith]

Hello,

Last year I was dismissed with payment in lieu of notice. The company made this payment along with my salary on the 8th of April 2015 and tax and national insurance was deducted by the company. In my contract it's stated that payment in lieu of notice can be made upon leaving work. I've since become self employed and I need to fill in the self assessment for the year 2015-2016.

Will I have to pay tax on the money I received from my previous company after filling in the self-assessment ?

Thanks for your help.

[section 44]

{closes eyes and waits for the spirits to tell me what the amounts involved are}

Will I have to pay tax on the money I received from my previous company after filling in the self-assessment ?

Yes

[section 44]

... the voices are still there and they seem to have had a change of heart on the quantum of the amounts involved.

Will I have to pay tax on the money I received from my previous company after filling in the self-assessment ?

No

[Greg Smith]

The total on my payslip was £2350. From that these deductions were taken: £293 - Tax, 200 - National insurance.

These are the fields in the self-assessment that I'm confused about:

• Taxable lump sums and certain income after the end of your job - excluding redundancy and compensation for loss of your job:
  
  Redundancy and other lump sum and compensation payments. Please read Help:

[bd6759]

You did not get reducndancy or compenation.

Your pay goes in box maked pay, and the tax deducted goes in the box maked PAYE tax deducted.

[LozaACCS]

The tax treatment of PILONS is to a great extent determined by the facts of each case, the starting point is your contract of employment, if this states that you will be entitled to a PILON if your contact is cancelled then you will almost certainly be liable to IT (and NI).
The fact that the ER deducted tax and NI is not conclusive of the correct treatment since many employers protect themselves by taxing the payment and leaving the EE to sort the issue out themselves.
Your reference to the inclusion of the entitlement in your contract is not very clear, I would suggest you examine the contract in detail, but remember that even if entitlement is not comprised in the contract then it might still be taxable if it has been the custom and practice of the ER to make such payments