Tax on final AL payment after maternity leave

[CrasterKippers]

I've been on maternity leave for most of this year and have decided not to return. I am no longer receiving maternity pay but understand that I should get a final payment for the annual leave I haven't taken this year. I've worked it out to be around £2000. Since April I've earned nowhere near the tax threshold, but obviously the £2000 is quite a big payment. Will this be taxed and then I'll end up randomly getting it back next year or something? Or will the "system" know that I haven't earned enough to be taxed, and I'll just get the whole lot? I haven't got any enhanced maternity pay to return by the way, I only got the statutory amount.

I think, but am not totally sure that as your tax code may not yet have been amended then it will be taken but then given back.

Two issues. If you haven't earned within £2000 (or whatever the gross payment is), then there is no tax to pay. However as previous poster said, HMRC may take 20% and refund at the end of the year.

If you won't be earning more than your personal allowance this year then ask HMRC to either not tax it or refund it immediately.

They are rubbish in a lot of ways, but if you can actually get through to speak to them, they are usually pretty good

www.gov.uk/government/publications/income-tax-claiming-tax-back-when-you-have-stopped-working-p50

Have a read of that, as it depends on your circumstances going forward. You might start another job, you might claim job seekers allowance (or whatever that is now under UC).

Fab thank you all