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bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 5758
Experience:  FCCA FCMA CGMA ACIS
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I was made redundant in November 17 and received Redundancy

Customer Question

I was made redundant in November 17 and received Redundancy pay, regular salary and also 6 months PILON together with about £1700 bonus.I was on £46k salary and my tax deduction was around £10,300.HMRC have advised this is correct, but to me it seems really high. Can you advise?
Submitted: 7 months ago.
Category: Tax
Expert:  bigduckontax replied 7 months ago.

Hello, I am one of the experts on Just Answer and pleased to be able to help you with your question.

Without full details of the actual payments received I cannot really assist. However, I can shed some light on what might have happened.

Firstly, of your redundancy payment, the first 30K is tax free. Now the tax tables which calculate PAYE assume that you will receive about the same amount of income every week or month. Thus a big amount such as that received in November will skew the system because it will then assume that all subsequent payment periods the same quantum of income will be received and tax accordingly. This will correct itself over time once you present your P45 to a new employer or when claiming benefits. The PAYE system should make you tax neutral by the end of the tax year. Any over payment at that point will be refunded.

I do hope that I have been able to shed some light on this matter for you.

Customer: replied 7 months ago.
Have I been charged £47 for that answer?
Expert:  bigduckontax replied 7 months ago.

I do not know, I am not privy to such information, but it seems possible.