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Self Assessment/Redundancy/Taxfiler query

  • Member PM.Dip
  • Practice Licence
  • 90 posts
  • # 116011

Hi all,

I have a client with redundancy pay during the year.  Taxfiler (software) seems to be doing something odd with the tax calculation, and I can't find a way of checking it independently.

For one thing, the savings allowance is not showing for the small amount of bank interest.  Odd??

Secondly, it is picking up a figure for 20% tax which is higher than income less personal allowance. (Overall income is only £12.5k, including around £6k redundancy i.e. £36k less tax received, Taxfiler is taxing £4.5k at 20%)

Any quick answers? I've emailed Taxfiler and will see if they respond tomorrow.  

Thanks,

Fiona

  • Member PM.Dip
  • Practice Licence
  • 157 posts
  • # 116029

Fiona~ said:

Hi all,

I have a client with redundancy pay during the year.  Taxfiler (software) seems to be doing something odd with the tax calculation, and I can't find a way of checking it independently.

For one thing, the savings allowance is not showing for the small amount of bank interest.  Odd??

Secondly, it is picking up a figure for 20% tax which is higher than income less personal allowance. (Overall income is only £12.5k, including around £6k redundancy i.e. £36k less tax received, Taxfiler is taxing £4.5k at 20%)

Any quick answers? I've emailed Taxfiler and will see if they respond tomorrow.  

Thanks,

Fiona


 In this case Redundancy pay is not taxable. So should not really be included, income should be stated as £6.5k only, redundancy pay up to 30k is treated as exgratia.

https://www.gov.uk/redundant-your-rights/redundancy-pay

  • Member PM.Dip
  • Practice Licence
  • 90 posts
  • # 116030

Thank you Vip,

The full redundancy amount was over £36,000, so £6,000 taxable.

After to-ing and fro-ing with Taxfiler Support, they must have done something in the background, as it is now just the £6,000 showing with tax payable.

Overall I have a good repayment to let my client know about.Smile

Regards,

Fiona

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