Redundancy and income tax

Paying tax on redundancy payments

A redundancy payment is taxable income. Your employer should deduct the tax and pay it on your behalf. If they don't, you will be responsible for paying that tax yourself.

After the end of the tax year

If you're made redundant by the end of the financial year you may have paid:

• too much tax and be due a refund, or
• too little tax and may have some more to pay.

What you do depends on:

• what entitlements you qualify for, and
• how you were taxed during the year.

Entitlement for working for families tax credits (WFFTC)

If you received a redundancy payment and WFFTC we'll send you a personal tax summary (PTS) in July (after the end of the financial year) that tells you whether you have tax to pay or are due a refund.

If you're not going to receive a PTS automatically you can work out if you are eligible for a refund by using the "Personal tax summary calculator" under "Work it out".

Find out more

Personal tax summaries (PTS)

How you were taxed during the year

If you received a redundancy payment and...	then you...	Find out more...
think you may have paid too much tax during the year	can work out whether you qualify for a tax refund.	How to claim a tax refund
no tax was deducted	have to file an Individual income tax return (IR3). Note If you filed an IR3 last year, we'll send you one automatically this year.	Income tax returns (IR3)

If you can't afford to pay a tax bill?

If you have an end-of-year tax bill you can't afford to pay, then you can:

• find out your options for repayment, and
• call us on 0800 227 771 to discuss your repayment options.

Find out more

• Find out if you need to file an IR3 return or receive a personal tax summary
• Estimate any potential tax refund or to tax to pay.

 

Date published: 17 Jun 2009

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