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Posted Tue, 21 Nov 2023 10:08:19 GMT by
I am completing my self-assessment tax return for a year in which I received a redundancy payment greater than £30K. The amount in excess of £30K was put directly into my pension by my payroll department. Is this amount subject to tax? And how do I reflect this on a self-assessment tax return?
Posted Tue, 21 Nov 2023 14:57:49 GMT by HMRC Admin 10
Hi
Any part of a lump sum redundancy payment that comes from salary, bonuses, PILON, or holiday pay does count as relevant UK earnings. However, only the part of the actual redundancy payment over the tax-exempt threshold of £30,000 will be classed as employment income and count as relevant UK earnings.
To pay the full redundancy payment into the pension as an personal contribution, the individual needs to have enough relevant UK earnings from a source other the redundancy payment to cover the full payment.

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