Tax advise

A question about : Tax advise

Hi all, don't know if this is the correct place to post this, I have been informed I am to be made redundant this year after 36 years service, I am at the moment working my 12 weeks notice, this will finish on the 31st of March 2015.
I currently pay 40% tax on my salary and company pension combined.
34,000 salary tax code 402l / 13,800 pension tax code br,
Salary paid on the 20th of the month, pension paid 1st of the month.
Redundancy pay 38,000 to be paid on the 20th of April I am paid under paye.
What I would like to know is, if I was to contact the tax office after the 20th of March after my last pay from the company and explain I will no longer be in employment and ask if I could get my tax code changed for the New tax year to 20% band, this will give me a 4 week window before I receive my redundancy pay, I know the first 30,000 is tax free but don't want to pay 40% on the 8,000.
should I ask the tax office to change my tax code on my pension from br to 20% band as I will not be seeking employment for 3 months or so and will be my only source of income.
do I have to tell the tax office I am being made redundant or can I say I have just left the company

Any advice would be welcomed.

Dave.

Best answers:

• This could get complicated.
  Firstly, BR is the 20% or 'basic rate' band - that probably messes up your theory.
  The other issue is that you will receive your redundancy pay on 20th April and, as you correctly state, Ј8000 will be taxable. However, this will mean that Ј8000 (plus whatever salary you get from 1st April to 20th April) will be received in the first month of the tax year and quite an amount WILL be taxed at 40% with no prospect of getting that back through your salary as you have left.
  I would go the opposite route. Ask HMRC to allocate all of your personal allowances at your PENSION source and ask for BR to be applied to your salary source FROM 6th April 2015. That way, only 20% can be deducted from your taxable redundancy AND you will benefit from your personal allowances on your pension source while 'between' jobs.
  And I would do this now - 20th March is a bit too close to 6th April for ensuring that all of this happens.
• Thanks for replying, if I was to take suggested route I think I would then pay 40% on my pension, br on employment, and my old tax code 402l on my pension for the next few months until I have left employment , would I have to get my pension tax code 're assessed after my redundancy payment as it will be to high for just my pension income, I don't mind paying 40% on my pension for now as it could save some income tax on my redundancy.
  Any advise would be welcomed
  Thanks Dave.
• Not what I intended although you seem to have the opposite view of the consequences of my suggestion.
  If you arrange for all of your allowances to be set against your company pension FROM 6th APRIL 2015 onwards, not now, you will benefit from your personal allowances right up until you regain employment. Your tax will also be correct.
  The redundancy payment - A BR code will apply tax of 20% whether the amount is Ј1000 or Ј100000. If this is operated against your current employment FROM 6th APRIL 2015, when you come to receive your redundancy the taxable element will only have 20% deducted - 40% completely avoided.
  I would still suggest, therefore,
  Personal Allowances against pension FROM APRIL 2015.
  BR code against your employment (including redundancy) FROM APRIL 2015.
  You only need to ring HMRC to have this done.
• Hi, thanks for you're reply I think the penny has dropped and now understand your reply.
  thanks again for your help.
  Dave.
• Redundancy money every time. I had three goes at it, one each in the 70s, 80s and 90s. One enabled us to start a family and drop an income, another paid for a house extension and the last helped clear the mortgage. Better jobs and career enhancements too.
  ______________
  lab gaya
• Can't seem to start a new thread 'cos I'm a newbie.
  My problem isn't that I've been made redundant. I chucked my old job and became self employed. As a self employed sole trader, I completed a self assessment tax return.
  I will now be in receipt of my occupational pension (OP) this year.
  This is additional income plus a lump sum.
  Income tax will be deducted from my OP at source. How do I combine my current self assessment and "at source" tax payments?