AIBU to think I might get heavily taxed?

TorroFerney · 22/05/2025 11:53

nightmarepickle2025 · 15/05/2025 10:39

Redundancy payments should be tax free

Are you saying that’s what you’d like to happen? They aren’t tax free above £30k.

Tibbyy · 22/05/2025 11:25

nightmarepickle2025 · 15/05/2025 10:39

Redundancy payments should be tax free

Redundancy payments and settlements are but payments for PILON aren’t, as they’re ordinarily taxed

Tibbyy · 22/05/2025 11:22

I don’t think she’ll be “landed with a tax bill”
as when I was made redundant the tax I paid that year was wrong, but I was sent a letter to say my tax code would be changed to recoup what I owed, so my personal allowance was lowered. In other years when I paid too much I’ve been able to get it refunded. You could always ask your old employer to pay it all into your pension if they have salary sacrifice, I don’t think you’d pay tax on it then.

Original poster

Ethicaldebacle · 17/05/2025 14:56

welshmercury · 16/05/2025 07:33

Your annual salary won’t be adding the two salaries together as you are only on three months gardening leave. By the time you start new job and get first paycheck there may not be much overlap.

I reckon it would happen for 2 month at most.

OP posts:

welshmercury · 16/05/2025 07:33

Your annual salary won’t be adding the two salaries together as you are only on three months gardening leave. By the time you start new job and get first paycheck there may not be much overlap.

spannasaurus · 15/05/2025 21:45

OP if you don't already have a personal tax account you should set one up now. Makes it much easier to check your tax.

https://www.gov.uk/personal-tax-account

Personal tax account: sign in or set up

Sign into or set up a personal tax account to check and manage HMRC records, including Income Tax, change of address, Self Assessment and company car tax.

https://www.gov.uk/personal-tax-account

lostinthesunshine · 15/05/2025 21:33

Bjorkdidit · 15/05/2025 21:29

I prefer garden leave if it means you're supposed to sit in the garden and do nothing, as opposed to doing the gardening.

Show quote history

😂 love it!

Bjorkdidit · 15/05/2025 21:29

lostinthesunshine · 15/05/2025 19:26

Not according to HMRC.

Show quote history

I prefer garden leave if it means you're supposed to sit in the garden and do nothing, as opposed to doing the gardening.

Original poster

Ethicaldebacle · 15/05/2025 21:19

Schoolchoicesucks · 15/05/2025 20:28

During the overlap period you will be taxed at a higher rate in one of the roles. Once you get P45 through from current employer, your tax code at new job will be adjusted and any overpaid tax will work itself through with a refund if necessary from HMRC at the end of the year.

Have your current employer confirmed you can work for another employer during this period of gardening leave?

Yes, that has been confirmed

OP posts:

Schoolchoicesucks · 15/05/2025 20:28

During the overlap period you will be taxed at a higher rate in one of the roles. Once you get P45 through from current employer, your tax code at new job will be adjusted and any overpaid tax will work itself through with a refund if necessary from HMRC at the end of the year.

Have your current employer confirmed you can work for another employer during this period of gardening leave?

Original poster

Ethicaldebacle · 15/05/2025 20:02

Blushingm · 15/05/2025 19:34

How will they?

Show quote history

Because I would have two pay cheques from two companies that if added on an annual basis it would be north of £130-140k

OP posts:

Blushingm · 15/05/2025 19:34

Ethicaldebacle · 15/05/2025 08:50

My concern is that to HRMC it will look I'm potentially making £100k (which I won't) .

How will they?

lostinthesunshine · 15/05/2025 19:26

HolyMacaroniBatman · 15/05/2025 19:13

(Also it’s garden leave, not gardening leave.)

Not according to HMRC.

HolyMacaroniBatman · 15/05/2025 19:13

(Also it’s garden leave, not gardening leave.)

HolyMacaroniBatman · 15/05/2025 19:12

It will work out fine, but your best bet is to be proactive. It’s a similar scenario to if you get paid a big bonus one month in the year.

if you go onto the HMRC website you can tell them how much you’re expecting to earn over the year and that gets taken into account. Making sure your new employer has your tax forms asap is also key, and you can do a self-assessment tax return if you want (I’ve had cases where HMRC is on top of things and others where it’s taken a couple of years to rebalance). You should also do a form online (can’t remember where it is but it’s HMRC again) on national insurance as you may end up slightly overpaying on this.

Pherian · 15/05/2025 19:12

Ethicaldebacle · 15/05/2025 19:06

Yes, they've said it's fine.

Show quote history

There is a calculator online that I use - it's not perfect and isn't 100% accurate, but it's close and it will give you an idea of the tax implications. You will probably need to find out what your Tax code would be if it's not standard.

The Salary Calculator - Two Jobs Calculator

See how your take home would be affected by having a second job

https://www.thesalarycalculator.co.uk/twosalaries.php

Original poster

Ethicaldebacle · 15/05/2025 19:06

Pherian · 15/05/2025 19:00

Have they told you that you’re allowed to work on your gardening leave ?

Show quote history

Yes, they've said it's fine.

OP posts:

Pherian · 15/05/2025 19:00

Ethicaldebacle · 15/05/2025 08:16

Morning ladies!

Any accountants that can clarify this for me?

I was made redundant and they won't pay a lump sum, so I'll be part of their payroll through my notice (now gardening leave).

In case I get lucky and find a job soon, what would be the tax implications? They told me I'd have to tell the new HR team that my new role is my "primary job" but I'll effectively have two jobs, and I believe one is heavily taxed. So how would it actually work?

Thanks!

Have they told you that you’re allowed to work on your gardening leave ?

Thursday5pmisginoclock · 15/05/2025 14:16

This happened to me a few years ago and I got taxed wrongly and then at the end of the year had a tax bill to pay as both taxed me normally, and I went into higher rate tax. You could ask your former employer to salary sacrifice the whole lot (or good proportion of it) into your pension to avoid this. Or make a one off SIPP (personal pension) payment with the extra income to avoid the 40% tax. Could also affect your child benefit if applicable so using pension is a good option.

Welshmonster · 15/05/2025 12:50

When you start your new job, you can have a P46 and I have a zero hours job I do alongside full time work. I want my tax code on my main job.
make sure your employer don’t decide they no longer need to pay you PILON.

leave tax code on old job as it will automatically transfer over. Your deductions will be messed up for couple of months and then it will sort itself out.

Destiny123 · 15/05/2025 12:03

Ethicaldebacle · 15/05/2025 11:44

Yes, of course that's a given :)

I'll still better off. But I still wouldn't want to pay extra tax just because I got "lucky".

Last year something similar happened to me, and the HMRC kept changing my tax codes (I had 2 or 3 changes) one was because they thought I didn't pay enough, and then they changed it because apparently I had paid too much.

Show quote history

That's standard. I've had a single job since Feb
.... am on my 8th tax code since April. No frigging clue what they're playing at but happens constantly I just file in a folder

Destiny123 · 15/05/2025 12:02

Ethicaldebacle · 15/05/2025 08:50

My concern is that to HRMC it will look I'm potentially making £100k (which I won't) .

You won't. Drs have 3 employers at least many times a year and they often overlap as we swap midway through the month. Just call them once the first job stops paying you, tell them your new estimated income and ask your tax code to be transferred. Often even up with a 1k over or underpayment every year...they'll either give it back to u or add it to your following year's deductions in may

Original poster

Ethicaldebacle · 15/05/2025 11:46

Merryoldgoat · 15/05/2025 11:45

The key to getting it right is to ensure that your current employer issue your P45 at the end of employment so HMRC know that you are no longer there plus completing a new started checklist at the new job and ticking statement C.

Once you have your P45 call HMRC and explain and they will send through a new tax code to your new employer via RTI which will likely be the normal cumulative code but they’ll have updated your YTD figs.

Amazing, thank you that's super clear advice

OP posts:

Merryoldgoat · 15/05/2025 11:45

The key to getting it right is to ensure that your current employer issue your P45 at the end of employment so HMRC know that you are no longer there plus completing a new started checklist at the new job and ticking statement C.

Once you have your P45 call HMRC and explain and they will send through a new tax code to your new employer via RTI which will likely be the normal cumulative code but they’ll have updated your YTD figs.

Original poster

Ethicaldebacle · 15/05/2025 11:44

JaneGrint · 15/05/2025 11:40

Yes a tax rebate won’t be immediate.

But I’d have thought it unlikely that any extra tax from temporarily losing the tax free allowance would exceed the extra income from temporarily having two jobs at once?
Even if it takes your payroll a while to sort the tax codes out once the gardening leave is finished?

Show quote history

Yes, of course that's a given :)

I'll still better off. But I still wouldn't want to pay extra tax just because I got "lucky".

Last year something similar happened to me, and the HMRC kept changing my tax codes (I had 2 or 3 changes) one was because they thought I didn't pay enough, and then they changed it because apparently I had paid too much.

OP posts: