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Where Taxpayers and Advisers Meet

Structuring a Redundancy over 2 Tax Years

Catherine T
Posts:32
Joined:Thu Jun 06, 2013 7:29 pm
Structuring a Redundancy over 2 Tax Years

Postby Catherine T » Sun Oct 06, 2019 12:05 pm

I note some recent posts on a similar matter.

I am being made redundant and employer has agreed to keep me on garden leave for six months notice (rather than PILON). This will take me to May 1st (ie new tax year.) At that point, they will owe me:

* 2019 calendar year bonus
* severance (of which first 30k tax-free)
* unused holiday

I presume the 2019 bonus will always be seen as 2019/20 income even if paid in the new year?

Can I get them to pay me the 30k tax-free in 2019/20 and get the remainder (taxable) of the severance paid in 2020/21 tax year (when I will benefit from a new nil rate band and benefit from climbing through the bands again? It is not clear I will find a role easily so may be unemployed for a while.)

Any thoughts as to how HMRC will view the above?

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