Tax On Redundancy Payment

barney15c | 18:19 Mon 21st Mar 2022 | Personal Finance

27 Answers

On a sum of £70000 - how much tax would have to be paid?
First £30000 is tax free, but do you pay 20% on £30001 - £50271 and then 40% on £50272 - £70000.
Or do you pay 40% on £30001 - £70000?

Calculating Average Interest

In One Hand And Out The Other

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ToraToraTora

Best Answer

ok assuming no other income you will get 30k tax free then the 40k will be treated as income for that tax year, you get £12750 allowance so your taxable income will be £28250, on that you will pay 20% tax + whatever national insurance works out as.

18:52 Mon 21st Mar 2022

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jennyjoan

some years back I received £7,000 - I had to pay back £3,000 tax - which left me £4,000.

Hymie

A final thought, barney15c has said that he expects an offer of around £70k – he might like to revise that expectation in light of posts in this thread, unless he has something in writing to the contrary.

KyleHargreaves

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KyleHargreaves

barney15c

Question Author

Sorry to take so long getting back. My confirmed redundancy offer is very nearly £70k which is 21 months pre tax salary. I work for the civil service and went on voluntary redundancy terms. I have nearly 42 years service. The offer will allow me to live of it until i take my pension in 17 months time. what i'm more concerened with is if i'm taxed at the 20% or 40% rate. No NI contributions come out of it.

barney15c

Question Author

i forgot to add i go at the end of this month (August).

jennyjoan

I worked for 40 years in the Civil Service and received £28,000 - always believed it was never enough as my friend who worked part-time received roughly the same amount.

you're lucky Barney thats a good amount but I am thinking you are in a higher position than I was. However I did ask a girl in Personnel (at the time) to work out my redundancy and then she quoted me around £70,000 - imagine my disappointment with the £28,000

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