This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our Cookie Policy.
Analytics

Tools which collect anonymous data to enable us to see how visitors use our site and how it performs. We use this to improve our products, services and user experience.

Essential

Tools that enable essential services and functionality, including identity verification, service continuity and site security.

Where Taxpayers and Advisers Meet

Redundancy compensation and tax return

Bemar
Posts:1
Joined:Sat Jan 14, 2017 6:02 pm
Redundancy compensation and tax return

Postby Bemar » Mon Oct 16, 2017 1:26 pm

Hi everyone,

Last year the UK insolvency agency granted me around £4,000 after the company I work for went bankrupt. That money was divided in:
  • Redundancy pay
    Unpaid holidays
    Unpaid wages
    Loss of notice
Two questions:
  • I thought I had to included it under ""Compensation and lump sum £30,000 exception for any amounts entered in 'Redundancy and other lump sum and compensation payments" but a HMRC technician said that I should created a new page for my old employer (even though I wasn't working for them in the 2016-2017) and include there these figures. Is this true? Should I also include here the redundancy pay or only the other payments?

    I didn't pay taxes for my loss of notice - only something called "notional tax". The UK Insolvency agency told me I don't need to include it in the tax return because it's not taxable. Is this true too?
Any help with these two questions would be appreciated!

bd6759
Posts:4262
Joined:Sat Feb 01, 2014 3:26 pm

Re: Redundancy compensation and tax return

Postby bd6759 » Mon Oct 16, 2017 11:39 pm

Unpaid pay and unpaid holidays would be taxable. Tax should have been deducted.

Redundancy is usually tax free up to £30,000.

Pay in lieu can be a tricky one. It depends a lot on what you would have been entitled to and the exact nature of the payment. Again, tax probably should have been deducted unless the insolvency service were happy that it could be included in the £30,000 exemption.

Taxable payments go on an employment page.

Google HS325 for information about lump sums and tax returns.


Return to “Income Tax”

cron