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  • Tax on redundancy

    I have been told that I am being made redundant in June. My current salary is £42000 so I am a 20% rate tax payer. My severance payment will be around £58000 which I will receive on my final payday. I will still be employed by them when the payment is made. I understand the first £30000 of the severance payment is tax free. How is the remaining £28000 taxed? I've been given conflicting information, one is saying that the first £3730 would be taxed at 20% and the remaining £24270 would be taxed at 40% and the other is saying that it will all be taxed at 20%, which is right? There won't be any PILON or holiday in my final pay, it will be my usual monthly salary plus the £58000 severance payment.