Redundancy PILON payment and getting tax refund
Discussion
Made redundant recently and my PILON payment of 13 weeks salary is due in next payroll, due to the way monthly paye works and getting a bulk payment I'm going end up over paying income tax by around 9k on it assuming I don't work again this tax year which highly likely as I don't want to lol.
I thought I could easily/ quickly claim it back using a P50 but I do self assessment so cant do that and at the moment if I stayed SA I would have to wait till I submit 26/27 return next year to get the refund (I cant afford to wait till then). Looking at the SA criteria now I don't actually need to do an SA anymore but because they already requested one for 25/26 I have to do that one, so I was thinking to do following,
1. Submit my 25/26 self assessment online now and say its my final SA, pay it and then move off SA to all paye for interest and div deductions for 26/27 tax year. I read it takes around a month for them to close your SA and move you to paye method to pay interest and divs.
2. Once on the paye set up with HMRC and I'm off SA I should then be able to submit a paye tax refund p50 online for current 26/27 tax year which should get paid in a month or so I hope.
I tried calling hmrc to ask if above would work but can't get through yet, do you think above will work or is there any other way to get a tax refund within the tax year without closing off my self assessment?
Thanks
I thought I could easily/ quickly claim it back using a P50 but I do self assessment so cant do that and at the moment if I stayed SA I would have to wait till I submit 26/27 return next year to get the refund (I cant afford to wait till then). Looking at the SA criteria now I don't actually need to do an SA anymore but because they already requested one for 25/26 I have to do that one, so I was thinking to do following,
1. Submit my 25/26 self assessment online now and say its my final SA, pay it and then move off SA to all paye for interest and div deductions for 26/27 tax year. I read it takes around a month for them to close your SA and move you to paye method to pay interest and divs.
2. Once on the paye set up with HMRC and I'm off SA I should then be able to submit a paye tax refund p50 online for current 26/27 tax year which should get paid in a month or so I hope.
I tried calling hmrc to ask if above would work but can't get through yet, do you think above will work or is there any other way to get a tax refund within the tax year without closing off my self assessment?
Thanks
Edited by BumFLuff on Monday 13th July 13:54
Does this mean you're assuming you won't work again in 2026/27? And no taxable rent, savings or dividends?
I believe you can claim a refund as soon as you like if you're overpaid on PAYE and have stopped working but if it later turns out there is a tax liability for the year you'll get belted with an interest charge at something like 8% p.a.
"If you have stopped work part way through the tax year and know that you are not going to have a continuing source of taxable income, you should be able to claim an in-year tax repayment using form P50 available on GOV.UK. This means your refund will be paid within the tax year, rather than having to wait until the end of the tax year. Once you have sent in a P50, if you are entitled to a repayment of income tax, HMRC will send it to you – this may be by cheque in the post, or direct to your bank account if you so request."
https://www.litrg.org.uk/tax-nic/how-tax-collected...
I believe you can claim a refund as soon as you like if you're overpaid on PAYE and have stopped working but if it later turns out there is a tax liability for the year you'll get belted with an interest charge at something like 8% p.a.
"If you have stopped work part way through the tax year and know that you are not going to have a continuing source of taxable income, you should be able to claim an in-year tax repayment using form P50 available on GOV.UK. This means your refund will be paid within the tax year, rather than having to wait until the end of the tax year. Once you have sent in a P50, if you are entitled to a repayment of income tax, HMRC will send it to you – this may be by cheque in the post, or direct to your bank account if you so request."
https://www.litrg.org.uk/tax-nic/how-tax-collected...
Panamax said:
Does this mean you're assuming you won't work again in 2026/27? And no taxable rent, savings or dividends?
I believe you can claim a refund as soon as you like if you're overpaid on PAYE and have stopped working but if it later turns out there is a tax liability for the year you'll get belted with an interest charge at something like 8% p.a.
"If you have stopped work part way through the tax year and know that you are not going to have a continuing source of taxable income, you should be able to claim an in-year tax repayment using form P50 available on GOV.UK. This means your refund will be paid within the tax year, rather than having to wait until the end of the tax year. Once you have sent in a P50, if you are entitled to a repayment of income tax, HMRC will send it to you this may be by cheque in the post, or direct to your bank account if you so request."
https://www.litrg.org.uk/tax-nic/how-tax-collected...
I will get some savings interest and dividends and small proportion may be 4k will subject to 40% tax so I will include that in my estimated 'income figure' for HMRC, the problem I have is the majority of my PILON will be taxed at 45% as hmrc will think I'm getting the same money every month from now on. The P50 I wanted to use but apparently if you are registered for SA already you cant use it, so because I don't need to be doing SA now (rules changed few yrs ago), I was going submit my SA for 25/26 then un register for SA and do it paye ( these days if you have < 10k investment income you doing need to SA) then that should open up the p50 route. I believe you can claim a refund as soon as you like if you're overpaid on PAYE and have stopped working but if it later turns out there is a tax liability for the year you'll get belted with an interest charge at something like 8% p.a.
"If you have stopped work part way through the tax year and know that you are not going to have a continuing source of taxable income, you should be able to claim an in-year tax repayment using form P50 available on GOV.UK. This means your refund will be paid within the tax year, rather than having to wait until the end of the tax year. Once you have sent in a P50, if you are entitled to a repayment of income tax, HMRC will send it to you this may be by cheque in the post, or direct to your bank account if you so request."
https://www.litrg.org.uk/tax-nic/how-tax-collected...
thanks
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