Redundancy payments and Adjusted Net Income

[cobblex]

A redundancy payment being received in January in excess of the tax free amount of £30k is going to push my 2023/24 earnings up over £120k.

Example - gross year to date earnings to Dec 23 £75k.
Redundancy payment of £50k being paid in Jan 24. £30k will be tax free.

Does Adjusted Net Income = £125k (meaning full loss of personal allowance).
Or does Adjusted Net Income = £75k+£50k-£30k = £95k.

Trying to work out if I need to pension away £25k out of my settlement.

Thanks

[NortonES2]

Your second figure is correct ie 95K

[cobblex]

Appreciate the response.

I would assume that's the case but HMRC themselves offer contradictory responses on this

https://community.hmrc.gov.uk/customerforums/pt/2e...
https://community.hmrc.gov.uk/customerforums/pt/17...

[NortonES2]

The 2nd link is talking about a benefit in this case free child care and the 30K tax free will affect this and other means tested benefits.

[cobblex]

Both are asking the same question as I read it.

I just got off the phone with HMRC, three different departments told me different things. First told me tax free element shouldn't be included. Second told me it should but why do i need to worry for 2023/24 when self assessment threshold is now £150k (Pointed out I'd still need to notify them I'd underpaid tax if I lose my PA). Third one didn't know but said wing it based on whether the £30k is shown on the P60/P45.

[PostHeads123]

May be it different for redundancy but I thought savings / div tax free allowance would be factored in before to see if you were over 100k but in my case they weren't. Earnings were 99.5k I had 500 interest and 500 divs and they worked out my income to be 100,500 and my I lost some of PTA even though the interest and divs used my tax free allowance. I did my SA online so there calcs.

Edited by PostHeads123 on Monday 22 January 15:28