J G

Thank you. May I just clarify one thing regarding completion of the SA101 - so I enter the amount of redudancy payment over the £30k threshhold in box 5. But do I need to enter £30,000, ie. the tax free element in box 9 or is that just for use where the redundancy payment is below £30k. Thank you

Hi. Apologies for the length of this thread! I will be made redundant on 2 April 2023 obviously just before the end of the 2022/23 tax year and will then take early retirement. I have a DB and DC pension with my employer. I plan to use all of my DC pension as my 25% tax free lump sum. I expect to receive the tax free the lump sum in May 2023 and start receiving my DB pension from June 2023, i.e. both in the 2023/24 tax year. I also expect to receive my severance payment in May/June 2023, again, in the 2023/2024 tax year. Question – am I correct to assume that I will be considered to have been taxed on the redundancy / severance payment in the year that I receive it even though I was made redundant in an earlier tax year, i.e., it will be considered 2023/24 income? The first £30,000 of my severance will obviously be paid tax free as it doesn’t qualify as earnings for income tax purposes. Question – as the first £30,000 is not treated as taxable income am I correct in saying it does not need to be included/declared on my self-assessment for 2023/24 or must it be recorded somewhere? Question – if there’s an amount of severance pay over/above the £30,000 figure where must that be recorded? Redundancy Sacrifice - my employer has given me the option to sacrifice part of my severance payment into my Defined Contribution pension scheme. I understand that this will be treated as an additional employer contribution which will be tested against the pensions Annual Allowance and Lifetime Allowance. I hope to sacrifice as much as possible of the severance over and above the first £30k tax free element. I expect to sacrifice approx. £45k. Question - as my employer is offering/handling this should may I assume the correct tax relief will be applied/received automatically or must I do something? I will have unused Annual Allowance for the 2022/2023 tax year of approx. £15k and a similar unused sum for the three previous tax years enabling me to leverage the carry forward rules do this/cover the sum I wish to sacrifice/pay-in over the annual £40k limit. On paper it may therefore appear to my pension provider that I have exceeded the £40k annual allowance for 2022/2023 but I will not have due to the carry forward rules. Question - in the event I receive a Pension Savings Statement from my pension provider saying that I have exceeded my annual DC allowance for 2022/23 (when I won’t have due to the carry forward rules) should I simply ignore it or should my employer/pension provider realise that I had unused allowances and therefore not issue a PSS? Question - on any self-assessment for 2022/23 or 2023/24 am I correct in saying that I must therefore respond as if/on the basis that I have not exceeded the Annual Allowance? Question – does the 25% tax free lump sum that I’ll receive in tax year 2023/24 from my DC pension need to be declared anywhere? Thank you!