Taxation/Deductions on Redundancy Payments?

[Mr Scruff]

Apologies if this is the wrong place - not sure if here or 'Jobs/Employment'!

Short story, I've been made reundant after only being at my organisation for 8 months. Redundancy package is 12 weeks pay plus payment in lieu of notice which I'm happy enough with (as happy as you can be when being made redundant!).

I'm confused as to what my tax status would be on this payment? The amount would be made up of redudancy, lieu of notice and 2012 performance-related bonus. I'd like to try and establish how much money I'd be taking home, my wife is currently on maternity leave so money is tight at the best of times, and I don't even know where to start looking for advice.

Many thanks.

[Mr Scruff]

Thank you for all the advice so far, I had a feeling much, if not all, would be taxable.

I have no idea whether it makes a difference but my contract doesn't state I can be paid in lieu of notice.

I was under the impression that redundancy payments were tax exempt (but didn't know for sure, hence asking!). Is this only relevant to the statutory figure then?

[Mr Scruff]

LC23 said:

This is very high level advice so I would suggest you seek specific advice on your circumstances as I do not have sight of the relevant documents.

Thank you, I think all the posts have highlighted how complicated this potentially is.

Agree that I need to get some specific advice - however (and I know it's a strange question) - who does one ask about such things? A financial advisor? As I previously mentioned I'm currently the sole wage earner in the family and therefore every penny is important to us.

[Mr Scruff]

Seems local CAB are closed post 4pm so will speak to them on Monday (thanks for the nudge in the right direction though, can't believe I didn't think of them).

I actually got a clear and rapid reply from my HR department - 'severance pay' will be free from deductions, 'pay in lieu of notice', 'bonus' and 'benefits in lieu of notice' are all PAYE deducted. Disappointing as the first item consitutes only 12% of the payment but I guess it's understandable. Still would like to get some independent advice (hence the CAB) just to be sure though.