Tax Implications on SMP

[NewMumSoon1]

Hi.

I am looking for some advice.

I've recently been made redundant and due to be paid around £5000 before tax next week. This covers my wage for this month, month in lieu and remaining holiday pay. I am not given a 'redundancy package' as I haven't been there for long. Anyway.. I am also pregnant and getting paid my SMP in a lump sum (I was passed the qualifying week).

Will this cause tax implications? As in will I be emergency taxed and able to claim back or? Sorry.. such a novice but just trying to work it all out!

It won’t be “emergency taxed”, it is quite unusual to go onto an emergency tax code, new employees sometimes go onto a week 1 or month 1 tax code which can mean overpaying tax but that is not even an emergency tax code. As an existing employee I would not expect you to be taxed on an emergency tax code or a week / month 1 tax code.

You will be taxed according to your usual tax code, but unfortunately you are likely to have a disproportionate amount of tax deducted. This is because the PAYE system assumes you will earn the same each month and the calculations are done assuming you will only use 1/12 of your personal allowance and 1/12 of each tax band.

If you have another PAYE payment during the tax year, any overpayment will correct itself at that point. If you are not expecting further PAYE payments the options are to await a refund which will come automatically at the end of the tax year, or there is a form you can fill in to request a refund before then (there are some criteria as to whether you are eligible to do this the link below will take you through it).

www.gov.uk/claim-tax-refund

I'm in the same boat but student loan is going to eat mine up which is annoying because if I got paid monthly then student loan wouldn't be applied to it

Oh greenette that is very annoying for you.
Have you asked if it can be split across two tax months?

Yes and they said no. I think you are able to claim overpayments on student finance back so I will look into it in April.