Where Taxpayers and Advisers Meet

Tax implication returning to same company after redundancy

Posts: 1
Joined: Wed Aug 06, 2008 4:08 pm

Postby frenjd » Fri May 09, 2008 5:48 am


I worked for a company for just under 2 years. I took voluntary redundancy in January and received 1 months salary for each year I worked there (22 months) plus an enhancement of 6 months salary if I left before February, which I did.

I received my pay off tax free as it was under the £30,000 limit.

I was recently offered a post back there as a self-employed contractor before they realised company policy would not allow me to return until a period of 6 months had elapsed.

They have told me that there is a very good chance of me still taking the role in August once the 6 months is up.

My friend has advised me that I may have to pay tax on my previous tax free pay off as I am returning to the same company less than a year after leaving, even though I will not be an employee of the company (self-employed).

He has advised me of this as a colleague took early retirement in November last year and was also offered a self-employed role this week but had to turn it down because he would have had to pay tax on his previous pay off.

The question is, would I have to pay tax on my previous tax free, lump sum redundancy if I return to the same company after 6 months but work for myself on a self-employed basus ?


Simon Sweetman
Posts: 1690
Joined: Wed Aug 06, 2008 3:11 pm

Postby Simon Sweetman » Fri May 09, 2008 6:23 am

In theory the answer is no - you have not got your post back. That though is only true if you are genuinely self employed, and in the circumstances that seems dubious - if you are only going to work for one company who you worked for before I would have doubts about your status and would want to be sure about that before "going back".

Return to “Income Tax”