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bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3814
Experience:  FCCA FCMA CGMA ACIS
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If you were paid a Redundancy payment of say £100,000 way back

Customer Question

If you were paid a Redundancy payment of say £100,000 way back in 2008. As I understand it £30,000 would be tax free! I didn't pay any taxes so what should I be paying?
Is there anything in the rules that any redundancy payments need to be recorded in the Company minutes?
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.
You are correct in your surmise that 30K of your redundancy pay was tax free. You should have been taxed on the balance of 0K. TGhis, if no tax had been deducted at source, have been declared on your annual self assessment tax return or its equivalent. You must make your peace with HMRC and declare it as soon as possible. You may have to pay interest on unpaid tax as well as penalties. There is no requirement for the redundancy pay to be recorded in the company's minutes, but clearly with such a large sum I would consider it appropriate were that the case.
Customer: replied 2 years ago.

Morning,

I'm not sure what to make of this! I was fighting HMRC back to 2012 and

came to the conclusion I was in need of support from an Accountant. I

was advised that in order for this to be accepted by HMRC any payment had to be recorded in the Company minutes!! I have never felt that this could be correct but assumed that the Accountant would know better than me!

Are you 100% sure that you are correct. So far I have paid out nearly £100,000 in taxes penalties and fees!

Expert:  bigduckontax replied 2 years ago.
HMRC are, as is so often the case, talking twaddle. Providing that you have a letter from your late employer telling you of your redundancy and the amount then that should satisfy HMRC. I suspect that this was a verbal advice. Never ever under any circumstances whatsoever discuss taxation matters with HMRC other than in writing. Then you have a hard copy record of what was said. If HMRC persists ask them for the statutory authority for the position they are adopting. I have invariably found that whenever I request this information HMRC's case collapses! I am unable to find any requirement for a redundancy to be minuted in the Company's records.
Customer: replied 2 years ago.

Just to be clear it's my Accountant not HMRC that are advising me on this!!

I will fill your rating shortly.

Expert:  bigduckontax replied 2 years ago.
Oh I see, I am of the opinion that it is not required as you probably realise!

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