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Posted Sun, 07 Jan 2024 02:05:08 GMT by
Hi all, I was made redundant last year and received PILON and ex gratia payments. My understanding is that £30k of this should have been tax exempt. But i'm just not sure where to enter these details online The P60 included the total gross of the redundancy pay. So i entered this full amounnt on the first few pages ( Income section) But when i then fill in the details for redundacy lump sums over the 30k - it sends the numbers sky rocketing. I.e when i get to the end summary page my Gross tax income is way higher than it needs to be, - because it is double counting. THe only way i can get the numbers to balance, is by ignoring my P60 for the salay question, and just entering ( total gross - redundancy pay) Is this the right way to do it? Feels quite clumsy. Welcome any advice here as i'm going round in circles. Thanks
Posted Wed, 10 Jan 2024 15:27:48 GMT by HMRC Admin 10
If already included the income on the employment page, do not put anything at the box for amounts over the 30k exemption.
Posted Wed, 10 Jan 2024 18:02:49 GMT by
Won't the advice above, if you include the whole income, result in an incorrect tax due to a) getting taxed on the 30k if it's entered as income, and b) getting NId on the amount above 30k? Normally I believe the answer is to ignore the 30k completely, and add any amount above it to the complex "other income" box you need to tailor your return to include, provided you have made sure that the legal form of the payment qualifies it for the relevant exemption.
Posted Thu, 11 Jan 2024 07:54:57 GMT by maxb
@bobby Baxter If you were made redundant, wouldn't you have received a P45 instead of a P60? If your P45 or P60 included the total redundancy pay, including the initial £30k of the ex gratia payment that was supposed to be exempt, then I think you have a complicated issue which might require talking to your former employer and/or HMRC to get sorted out, as your employer seems to have treated the entire payment as taxable. If your P45 or P60 included the redundancy pay, minus the £30k exemption, then that's what happened to me too, and quite a few others who have ended up at this forum - what HMRC Admin 10 already said above appears to be the consensus, though I have not been able to find any written documentation to refer to that says that.
Posted Thu, 11 Jan 2024 07:58:25 GMT by maxb
@HMRC Admin 10 Please could you confirm that the amount up to the £30k exemption should still be entered in "Compensation and lump sums payments up to the £30,000 exemption." ? Because in another thread in this forum,, HMRC Admin 5 indicated the Other Income section (page Ai 2) did not need to be filled in at all in this case!
Posted Tue, 16 Jan 2024 15:48:21 GMT by HMRC Admin 5
Hi maxb

If the redundancy payment has been included in your P60 information and you show this at the employment section you include the amount up to 30k, in that box only if not already accounted for in the P60 info.

Thank you

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