Redundancy Income tax and unapproved shares

[singapore_expat]

Good morning all,

I was made redundant on 31st March 2013 and paid severance in the April 2013 pay run. I relocated oversees on April 6th 2013 and have not worked in the UK since.

On my final payslip it appears to make a distinction between the first £30k and the remaining amount, but to my calculations I've paid ~40% on the lot. Additionally, I did not previously qualify for any tax free allowance due to my normal salary and bonus - but if you minus the £30k, I should've this time (I think).

So my first question is: should I have been taxed in the 2012/3 year or 2013/4? My employment was terminated on 31st March 2013 but I wasn't paid until the end of April 2013? I've basically paid a significant amount of tax (when £30k is supposed to be tax free) and want to know if I can claim it back either by Self Assessment (which I have to do anyway as a NRL) or another means? Or have I misunderstood this completely?

As part of my previous employment, I was also awarded Performance Related Shares (some free, others as options). It was a 3 year scheme, awarded in 2011 and 2012 but as I was made redundant (good leaver or words to that effect) they allowed me to keep them and the vesting date was said to be my termination date (31st March 2013). I sold these shares in July 2013 through my previous employer and they withheld/paid a significant amount of IT and NI on them (tax code 0T?). Can I claim any of this back? Is the vesting date the date on which the tax is calculated even though I sold them in following FY - i.e. this is when I actually made any 'income' on them?

I have approached a tax account in the UK who had previously done my SA - but he said it was too complicated to take on? Really? Who else can help if not a tax accountant?!

During the past 4 years in the UK I ended up owing HMRC thousands each FY end, even though I was PAYE, so some payback would be lovely.

Would very much appreciate some guidance/advice.

Many thanks.

[section 44]

should I have been taxed in the 2012/3 year or 2013/4? My employment was terminated on 31st March 2013 but I wasn't paid until the end of April 2013?

2013/14

I've basically paid a significant amount of tax (when £30k is supposed to be tax free) and want to know if I can claim it back either by Self Assessment (which I have to do anyway as a NRL) or another means?

If you have overpaid tax then this can be reclaimed through self-assessment.

[AvocadoK]

As to which tax year you should have been paid on, this depends on the date you were entitled to the payment. The paperwork on your termination payment probably stated that this date fell in April 2013, and was therefore taxed in that year.

Although the first £30k may have been tax free, the PAYE system deducts tax on the taxable part of such a payment with no personal allowance being given, and only one twelfth of the basic rate band. You will have paid 40% on most of it, and maybe 45% on some.

You will end up having overpaid tax, which will get repaid via the self assessment return, as section 44 has said.

As regards the shares, tax is payable when you are given the shares, even though you did not sell them til later.

There are lots of tax accountants out there for whom all this is above and beyond what they can do, especially when combined with your potentially non UK resident status. Being a tax accountant doesn't mean you can suddenly being able to do all aspects of tax. It is a vast subject. And if you drive a new BMW, you would not take it to a local garage, so to speak.

[singapore_expat]

Thanks for your replies - and take your point AvocadoK with regards to the vastness of the subject. Any pointers as to where to look for a specialist?

According to my calculations I've paid 42% IT and NIC and 47% IT and NIC on the two separate restricted share awards - which seems a little high, seeing as though I haven't worked this tax year (in the UK)... the Tax/NI Rate specified is '0T Month 1/W 1'. I was no longer an employee/on the payroll when the shares were exercised.

Are either the restricted share awards or approved Share options liable for CGT once exercised?

Thanks again.

[singapore_expat]

And finally, slightly off topic - if I use a Tax Accountant in the UK for my SA, should I pay VAT or not? Some I've approached say yes, others no - owing to my non-resident status outside of the EU.

Of course, I can just opt to use the ones that say no but surely there is a hard and fast rule?

Cheers.

[AvocadoK]

Yes, income tax is chargeable on income and shares from your employment even after employment has ceased.
CGT is not payable if you are non UK resident,
VAT is not chargeable on accountancy fees charged to a private individual resident outside the EU.
You could try the "Find a professional" tab at the top of this page and look for someone whose entry mentions the specialities you require
Regards
aK