paying tax

[Connemmara]

I will be receiving in November about £11,000 (I think) from a scheme that I paid into when I was working. Now I know I will have pay Inland Rev about £3,000 in tax cos this same thing happened to a friend of mine - however she declared her tax amongs other things and amalgamated that tax with others. Anyway coming back to me when I get this money I need it all - can I pay the tax back on a monthly basis. Thanks for any answers.

[factor-fiction]

II recall you raised this previously and I don't remember now why you expect to have to pay tax on it. What was the scheme? If you do have to pay tax then if it's paid in your pay packet you won't have any choice about when the tax is paid- it'll probably all get taxed at the appropriate rate in one lump. Will you have to pay NI on it as well?

[factor-fiction]

Will it be paid through payroll. It may be different if you get a cheque or the money is paid into the bank- but tax may well still be deducted first.
Can you clarify what the scheme was?

[Connemmara]

I am sorry I did raise it before - it was called Widows and Dependants - and unwittingly I paid into it as did my friend - you only get it when you turn 60. My friend did not recall this when she was 60 last year and she phoned Pensions Branch and to her delight about 5 months after her birthday she received £6,000 of which she had to pay £2,000 - a year later she still has not paid it because she pays tax on other things so she says she is going to amalgamate the £2,000 amongs other things. Hope that does not confuse you.

[factor-fiction]

Well I don't understand why your friend had to pay so much tax on it, unless she was a higher rate taxpayer.
Anyway, if you get the money paid gross as a cheque/bank payment rather than via payroll, you'll need to declare it on your year end tax form and it may reduce your allowance for next year so if you pay tax next year this tax will effectively be spread over the year. Thta's my view.

[Skyline D]

I'm not clear exactly on what it is or why there will be so much tax on it (I seriously doubt it will be that much since the other info suggests you aren't a higher rate taxpayer).

However, there's no chance that the tax will be collected through a tax code amendment for next year if it's as high as that. If it's really not taxable at source then it will be taxed based on a tax return to 5th April 2011 and payable by January 2012.