Claiming A Tax Rebate On A Voluntary Redundancy Payment.

[barney15c]

I have recently recieved my net VR figure, and leave my employer on 31st August.
The compensation offer was £72k of which i will pay approx £16k on the remaining £42k (after taking into account the first £30k is tax free) giving me a net compensation of £56k.
So it appears that this moved me into the 40% tax bracket. I was paying 20% on my £41k per annum salary.
I do not intend to work afterwards as i take my works pension in Feb 2024 (17 months time).
Will i be able to claim a tax rebate on some of the £16k or am i stuck with it.
I am totally inexperienced in tax matters and dont know if i can claim, when i should put in a claim, or if this is something IR will do automatically or if i have to claim it myself.
Any advice would be appreciated.

[bobbinwales]

There's a form p80 or something.or do o line.or wait to april

[Buenchico]

Give the tool here a try:
https://www.gov.uk/check-income-tax-current-year

[mumstheword1]

I received £56000 VR so only paid tax on £26000 started a new job month after and the following May I received over £5700 tax rebate. I know my circumstances are different.

[barney15c]

Thanks for everyone who answered so far. Mark yes i definately will be be putting in a claim for a tax rebate as soon as i leave.

[Maydup]

I took VR in 2020 and am loving life after work. I wish you the happiest of times.

Here is the maths (Very roughly based on the info given)

Your salary was £41k and you have worked 5 months of this tax year.

Taxable Income £17,083
Taxable VR £42,000
Total = £59,083
less personal allowance assuming its £12,500
Total taxable income = £46,583

So yes you will receive a rebate as your income is below the £50k threshold. The 40% deduction was because the IR software assumes you will keep earning at that level.

At a guess you are due approx £8k back as you have paid twice as much tax on the £42k as you should have.

[barney15c]

Thank you Mark, i had a feeling that was what it should have been, many thanks!

[jno]

not all your answers have come from Mark Asbestanswer, helpful though he is!

[Hopkirk]

I'm not sure I agree with Maydup's calculation.

The personal allowance means the first £12,500 is not taxed. However surely it does not reduce your taxable income, it just means that part is not taxed.

[Maydup]

Big apologies Barney, Hopkirk is right.

Your salary was £41k and you have worked 5 months of this tax year.

Taxable Income £17,083
Taxable VR £42,000
Total = £59,083
less personal allowance assuming its £12,570


Tax on 12570 = 0
Tax on 50000 - 12570 = 37,430 x 20% = £7486
Tax on 59000 - 50000 = 9000 x 40% = £3600

Total tax =£11,086

You are due approx £5k rebate not £8k.

[barney15c]

Thank you Hopkirk and Maydup - 5k is better than nothing!