Tax on settlement payment

[Myal]

Not sure I'm posting in the right place but need some help.

I've recently agreed a settlement with work and mutually agreed a redundancy.

Last payment was made up of PILON, accrued holiday, overtime owed which would have been taxable and redundancy and ex gratia which was tax free.

I paid 33% tax on this despite being in the 1250 bracket.

I made a tax refund claim with HMRC and they've written to me today to say I paid the correct amount?

Can anyone explain (in layman's terms please!) Why I've paid too much tax?
This payment was made in May and I received a very small sum of money in April as I was on sick pay.

Thanks in advance.

Bumping

Can you post the figures for each amount, your pay to date since April 6 and your tax code.

I’m guessing that for the amount of tax year done, the payment would put you in a higher tax bracket. If it’s all yo7 earn for the year then you’ll be entitled to a refund

Add up all your taxable earnings in that financial year and see if it pushed you up a tax bracket? Are you in England?

Thanks for the replies.

@TyrionsNextWife, please see screenshots below. These are the two payments I have received so far this tax year. No other job taken.

I am in England, yep. These are the two payments I have received so far this tax year and it shouldn't push me up a tax bracket should it? Unless the system assumes I would be earning that each month and assumes I'll be in a higher tax bracket?
But, I've declared the payment is a severance payment to the tax office and they still think I've paid the correct amount of tax?

I can’t read the figures. They go blurry when I try to increase the size of the screenshot.

The system can’t account for the fact that you won’t get any further payments for however many weeks so it’s likely that your payments in lieu took you into a higher tax bracket. You can get that back once a certain amount of time Has passed with no salary.

Sorry! I cant seem to fix it.
But, that makes sense although in the online tax back request, I did say I wouldnt be working this year. I'd rather I had the money now to invest in starting up a small business than wait.
Thank you for explaining though.