Tax on a lump sum

[secretllama]

Looking for any help with tax question ....

I am pregnant and being made redundant at the end of april. Thankfully the date of redundancy roughly matches when I'd be going on maternity leave anyway and I'm entitled to full maternity pay which I'll be getting in a lump sum along with my redundancy pay in april.

My question is, as that lump sum payment will be paid onthe first month of the new tax year and the payment will be a significant amount , how is tax worked out on this....ie I'm not in employment earning say 18k a month but will I be taxed as if the lump sum of 18k is my monthly payment and have to claim it back? Not sure how it works .....

Thanks !

You may need to claim some back, yes. Your tax allowance is usually divided by 12.

You know the redundancy pay up to about 30k is tax free? So it's only the mat pay you need to worry about.

Yep I knew redundancy was tax free it's the maternity that's making up the bulk of the lump sum....

I kind of thought I'd have to pay more tax then claim back as thats usually the case but hope I can claim back in the next month as the money will be needed!!

Thanks for your help

You will be taxed as normal on contractual payments like notice pay and maternity pay. Any compensatory payments (redundancy, payment for loss of office) should be paid tax free if under 30k.