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Posted Sun, 26 Nov 2023 18:10:37 GMT by Jinster768
My P45 total pay and tax has been automatically imported into my tax return employment pages. This includes salary plus PILON, 30k redundancy (not taxed) and additional redundancy taxed. Do I need to complete the employment lump sum pages if the correct total pay and tax figures are already included in employment totals? If this is required, I can manually deduct the gross pay amounts to avoid double counting income, but I can’t do the same for tax as this is not itemised separately for each category of payment. Alternatively if I’m satisfied the total numbers which have been automatically filled in the employment pages are correct, can I just ignore the lump sums section?
Posted Wed, 29 Nov 2023 12:38:32 GMT by HMRC Admin 25
Hi Jinster768,
You will need to complete the additional information section of the return.
Online this will be - do you want to claim reliefs.
If you have had a redundancy payment up to £30,000, after any  post-employment notice pay has been taken off, and against which your employer has allowed an exemption on, put the total  amount  that you received in box 9.
If your payment after any post-employment notice pay  has been taken  off, is more than the £30,000 limit, you’ll have to pay tax on the difference. Put the  amount over £30,000  in box 5, any tax taken off  in box  6 and the £30,000 limit in  box  9.
Thank you. 
Posted Wed, 29 Nov 2023 12:55:55 GMT by Jinster768
Thanks for your reply. I’m still confused as the total pay and tax on employment pages already include theses amounts (directly imported by HMRC from P45). If I add the redundancy payments again in the additional information without reducing the total pay numbers then surely I’m declaring more income than I received?
Posted Wed, 29 Nov 2023 17:28:51 GMT by Jinster768
Some hypothetical figures to illustrate: Pay from this employment: 100. This is taken from P45 and includes: 40 salary 50 redundancy (of which 30 not taxed) 10 PILON Tax deducted: 20. (This is not broken down by the same elements as above). This is also the amount on the P45 My issue is if I include any of the redundancy or PILON in another box, the tax calculation treats it as extra income above what is on my P45. So should I be completing the additional boxes per your previous response and reducing the amounts in ‘total pay from this employment’ by the same amount?
Posted Thu, 30 Nov 2023 15:21:14 GMT by HMRC Admin 32
Hi,

You will take the exess redundancy pay figure away from the figure you have entered on the employment page.

Thank you.
Posted Thu, 30 Nov 2023 16:36:45 GMT by Jinster768
Thanks. Should I also subtract the £30,000 redundancy payment from the figure on the employment page, or just the amount above the £30,000?
Posted Mon, 04 Dec 2023 12:14:13 GMT by HMRC Admin 5
Hi Jinster768

The figure on the employment page should match that of your P45 or P60.  
In the additional information section (SA101)    on page Ai2, box 5, you would declare: 
" Redundancy, other lump sums and compensation payments – the amount above the £30,000 exemption" and any tax taken off in box 6.  
With the online tax return, tick 'yes' to "Did you receive any other UK income, for example, employment lump sums, share schemes, life insurance gains?"when tailoring your tax return.  
This will provide the boxes for redundancy payments.

Thank you
Posted Mon, 04 Dec 2023 12:49:11 GMT by Jinster768
This advice seems to contradict what I was told earlier in the thread. If the figure on the employment page matches the P45 (which already includes the excess redundancy payment above £30,000) and I also add that same excess redundancy payment in the tailored ‘employment lump sums’ section of the online return, then the tax calculation adds these 2 numbers together to create a higher total income than I received, and an incorrect tax calculation as a result. If I reduce the income on the employment pages by the amount of the excess redundancy figure and then include this excess redundancy figure on the ‘employment lump sum page’ (ie what was suggested by HMRC Admin 32 earlier in this thread), then the total income on the tax calculation is the same as the P45. Can you please confirm this is the correct approach?
Posted Mon, 04 Dec 2023 14:12:11 GMT by Jinster768
Update: due the conflicting advice I was receiving, I called the HMRC helpline and received advice from a technical advisor. That advice was not to include lump sums elsewhere on the return if they are already included in the P45 which has been imported directly to the total pay and tax on the employment pages. If this is incorrect please advise.
Posted Thu, 07 Dec 2023 07:39:10 GMT by HMRC Admin 25
Hi Jinster768,
The original question included the reference of the 30k redundancy payment and read as if this was included in the P45 figure.
If not taxed, then there is no need to include the additional information page as the relief has already been applied and you will just use the employment page and the figure from your P45.
Thank you. 
 
Posted Fri, 08 Dec 2023 09:06:44 GMT by HMRC Admin 25
Hi Jinster768,
To confirm, you will take the exess redundancy pay figure away from the figure you have entered on the employment page.
Thank you. 
 
Posted Fri, 08 Dec 2023 09:57:09 GMT by Jinster768
If I take the excess redundancy figure away from the total pay figure on the employment page, then that total figure does not match the P45. As a result, the system provides a red ‘warning’ that my income amount is not correct. That is why I called the HMRC helpline for advice, and I was clearly told by a tax advisor that if all redundancy payments (except the first 30k) are already included in the P45, then they do not need to be included elsewhere in the return. To be clear, in both approaches the tax calculation is that same. The difference is that when I reduce the total pay figure by the amount of the excess redundancy and include this amount in the lump sum section, I get a persistent warning that my total employment entry is incorrect (presumably because it doesn’t match the P45 and/or because the tax looks too high for the income). Give all of the above I don’t understand why the excess redundancy should be removed from the total pay figure: it creates an error in the return that has to be investigated/explained and makes no difference to the tax calculation.
Posted Wed, 13 Dec 2023 12:28:28 GMT by HMRC Admin 10
Hi
The P45 figure will only be the taxable income so will already include the taxable element of the redundancy payment and the tax deducted so you would not need to declare separately as this would duplicate the figures. 
Posted Wed, 13 Dec 2023 12:52:51 GMT by Darren Bailes
Hi - I am trying to get the answer to this as well, and the three different Admins seem to be giving three different answers. Im in a similar sitatuion. My P60 shows I earned a figure - lets say for ease, £130,000. Of this, I know that £30,000 was a redundancy figure, which is laid out in my settlement agreement as an ex gratia amount. The £30k is included in the £130,000 despite several post and web articles stating that it wont be as I have done the math through the payslips and it all adds up. If I deduct the £30k and place it in the 'other income up to £30k' box, when I do my full calculation it shows that i have earned £100,000 and that is what im taxed on, issuing a rebate. If I dont move it from the employer income figure, I apparently owe a small amount but given that it should be tax free, that cant be correct! Every online calculator ive used shows that essentially I should have a rebate but cant get confirmation from HMRC that the input is correct.
Posted Thu, 14 Dec 2023 07:29:51 GMT by maxb
I am in a roughly similar situation myself - although in my case, the part of my redundancy figure up to the £30k tax exempt limit was NOT included in my P45, but the part above £30k WAS included. To the best of my knowledge, (and according to the HMRC web chat representative I spoke to) any part of a redundancy figure appearing in the P45/P60 is a mistake on the part of the employer. Based on that web chat, when I submit my own tax return (waiting on some other documentation), I am planning to deduct the redundancy figure from my P45 value, add it back in under the relevant "Other income" boxes, and write an explanation in the "other information" box citing the web chat advice I received. By the way, since you've had redundancy figures included in a P45, you might want to double check your employer didn't over-charge you National Insurance contributions - the portion of a redundancy payment above £30k is subject to Class 1A employer's NICs but NOT Class 1 employee's NICs, somewhat unusually. Regarding your comment about not being able to separate tax on the P45 into itemized components - happily you don't have to, as there is a question in the "Other income" section "Have you left 'Tax taken off' blank because the tax is included in your Employment pages?" which lets you declare all the tax taken off in the Employment pages and none in "Other income". As if all this complication wasn't enough... it turns out there can be an actual difference in how much tax there is to pay, after moving the additional redundancy payment above £30k from the P45 figure on the employment pages of the tax return, to the "Other income". This is because of the statutory order in which difference kinds of income are taxed. In my case, I had a small amount of dividend income, which is taxed after regular employment income, but before additional redundancy lump sums. Since dividends are taxed at different rates, and have their own nil rate allowance, but still contribute to the assignment of income to basic/higher/additional rate bands, dividend income can push the additional redundancy payment into a higher tax band than it would have been at, had it been treated as ordinary employment income. (I include this in case it helps understand why the total tax due might change, just by moving the redundancy payment from one box to another.) And then... it turns out HMRC's online self assessment filing web pages have a bug in the "View your full calculation" feature ... it looks like someone made a mistake in the conditions for when to display what parts of the calculation, and the "Redundancy, lump sums, compensation etc." section is missing out from the full calculation breakdown (even though its sums are still added to the bottom line) ... unless you have dividend income that exceeds the dividend allowance (£2000 in 2022-23)! That *really* did not help, with understanding the "order of taxation" thing, nor with just wanting to confirm the sums added up right.
Posted Tue, 26 Dec 2023 15:53:43 GMT by GS2023
I have the same issue on Redundancy figures. The Income Tax calculations and the Total Income Tax due dont add up. Not sure HMRC has figured this bug out.
Posted Tue, 26 Dec 2023 15:56:07 GMT by GS2023
HMRC - can you please let me know how to fix the Tax calculations? Happy to send an email with my calculations and the error in the Self Assessment.
Posted Sun, 31 Dec 2023 22:56:15 GMT by maxb
I reported the bug to HMRC web chat on 8th June. Since no fix has been delivered by this point, I think there is little hope of it being fixed for 2022-23 returns. The good news is that the total tax due is correct, so the return can still be submitted with no problems - it's just the details of the displayed calculation that are missing some bits. What you can do as a workaround is to TEMPORARILY modify your return to report receiving £2001 of dividends. Now the missing bits of the calculation show up - along with a very small amount of tax on dividends. You can use that calculation to understand how your tax is being calculated - just be very careful to reset the dividends section back to your real dividends before final submission!
Posted Mon, 08 Jan 2024 13:05:56 GMT by HMRC Admin 5
Hi GS2023

There is no original question for this to be answered correctly.

Thank you
Posted Tue, 09 Jan 2024 22:32:12 GMT by maxb
After getting a chance to ask a tax professional's opinion (keep things simple; if income is included in your P45 treat it that way, don't try to reassign it elsewhere on the return if you don't absolutely have to, to get a reasonable calculation) and seeing that echoed in some of the responses in this thread, and this one too, more simply: https://community.hmrc.gov.uk/customerforums/sa/8854d60e-2d98-ee11-a81c-002248c69e85 - I'm changing my mind from what I said earlier in this thread and will just go with the advice that page Ai 2 does not need to be completed if the P45 has included the taxable sum.

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