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bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 7785
Experience:  FCCA FCMA CGMA ACIS
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I was a pilot in Thomas Cook. I have been on long term

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Hi, I was a pilot in Thomas Cook. I have been on long term sickness pay as I have multiple sclerosis ,through Canada Life insurance who paid me a monthly amount which they are still paying. I have been offered a one off lump sum payment of £358,000. I wanted to know whether this is a good deal and how much I would have to pay tax on this amount to decide if I should take it. Please advise. Thanks
JA: Which tax year is this for?
Customer: 2019-2020
JA: Anything else you want the Accountant to know before I connect you?
Customer: no

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

 

Of this 350K severance pay the first 30K is tax free, the balance at your marginal rate of tax. It might ease your tax burden were this severance pay split over two tax years.

Customer: replied 6 days ago.
sorry, what does marginal rate of tax mean? Also, how would I split it over 2 years?

You would have to get the receivers or administrator of Thomas Cook to spread the payment, which I accept, might not be possible.

 

The marginal rate of tax is your highest rate. 328K would put you well into the 45% tax bracket.

bigduckontax and 3 other Tax Specialists are ready to help you
Customer: replied 6 days ago.
Wow! 45% is a huge amount. How does Amazon get away with their low taxes?!? Thanks for your advice, I will think on it.

Delighted to have been of assistance. \have you found another job on the flight deck, by the way?

Customer: replied 6 days ago.
Unfortunately I have MS so am unable to currently fly. This is why I thought a lump sum could help me start a new career as a monthly payment option would stop if I were to find alternative work.

I once did a weekend trip Gatwick to Paris with DanAir. Known colloquailly as Dandare pilots were alleged to board with string and rolls of insulating tape to conduct running repairs!

Customer: replied 6 days ago.
All the airlines have their own insider names and most are a lot less complementary than Dandare! Sleazyjet, Ryanscare etc.! We all wanted to keep the show on the road but it's the engineers firmly in charge of the magic silver tape these days!

I flew Ryanscare in its very early days Stanstead to Rimini. That was before it got its unenviable reputation. The only thing that was odd was that there was no seat allocation, but by a dint of speedy approach to the aircraft got exit seats both legs. I have never flown Sleasyjet though my daughter did often before she emigrated to NZ.

I have a Thai wife and we now fly business class to Bangkok, far more comfortable.

Customer: replied 6 days ago.
That's a much nicer way to travel! Nothing wrong with Sleazy I guess but the two of them have radically changed the lifestyle of pilots. Much less enjoyment in the job now as though the idea of enjoying your job is wrong! My first job was with Loganair, a BA franchise in Scotland. Very challenging but completely rewarding almost every day. Spent seven years there and loved every minute!
Customer: replied 6 days ago.
Take away's here, must go but thanks for your help and hope you get back to Bangkok soon!!

I'll try!