Tax on redundancy payments

LegacyUser

Hey all quick question. This might sound stupid, but I can't find out any other information. The words "voluntary redundancy" entered my life recently - we're being offered a deal by the company in coming weeks. There is no further work in the field I'm in and I need to start looking outside it.
Obviously I'd be paid a lump sum. Someone mentioned tax on these lump sums yesterday - can anyone explain to me how that works? The tax website is a bit confusing, with a lot of exemptions. Do you have to pay tax on a redundancy lump sum like that, and if so, how much??

dudara

It's my understanding that the amount of the redundancy sum equal to the statutatory redundancy amount is tax free.

The rest of the sum is liable to tax, but steps can be taken to reduce the amount of tax due. A lot of companies will provide employees with the most tax efficient package, but if your company is not doing this, then get in touch with a tax advisor.

LegacyUser

Anything over the statutory redundancy amount is taxed but you can apply for something called top slicing from the tax office and they will review the tax you paid & you will probably get a refund.