brumdaisy

Boring I know but someone out there might be able to help?

Im about to be made redundant and will get a nice redundancy payment which is tax free (apparently).

My boss wants to reemploy me on a casual basis but Im told that the Inland Revenue might object and tax my redundancy

Does anyone know 1)if this is true 2)how they work out how much they would tax and 3) any (legit) way around it?

Ive been warned not to speak to inland revenue directly as they're cracking down on employers doing this and could make notes on my file to catch me out later....

Any suggestions???

mart360

Redundancy is not tax free,


re talking to the IR what bullsh*t has your boss been eating. put it this way, the IR will know what you have been paid redundacy wise, sounds like your boss is pulling a fast one,

who would you like to upset?? your boss or the IR


why make you redundant and then employ you on a casual basis??? anyway your boss cant do that, as your role is redundant, not you

again be carefull sounds like your boss is a ...

Mart

brumdaisy

ok lots of things to clarify....

As much as I have spent many hours ranting about my boss, on this occasion he's helping me out as I have a choice between redundancy or a ****e job with our parent organisation and I chose redundancy. It was a colleague who 'tipped me off' about not talking to IR - Ive not a clue?

I work in the public sector and our money has run out (I only ever had a fixed term contract but still entitled to redundancy) so he's basically helping me out cos whilst they havent got the money to keep me on full time they can afford to give me a few days work here and there...

Someone suggested that if I set up as a ltd company and my boss employed my company that would be different to just reemploying me?

Like I said I aint got a clue on this one

Trout

iTrader: (1)

You redundancy is only tax free up to a certain amount. Over that amount it is subject to some tax. I cannot remember the limit although £35k rings a bell.

In terms of reemployment - your advisors are correct - your redundancy will be subject to normal earnings taxation if you return to do any work for your current employer. This limitation is twelve months.

AFAIK - It really does not matter how you do it - it is your tax code that will be assessed. We had this issue when we made some IT people redundant and some of them could have been redeployed by an IT service company. There redundancy could have been taxed.

Of course you could try this - hide via a limited company - and not tell the IR. Usually this is called tax evasion and can result in a visit from plod to being banned from being a Director in extreme cases. Whatever happens they could mark your card and come after you years (seven) later and ask for the money back with all the incurred penalties in the interim.

There is nothing to stop you going back to work for your employer as a contractor - it simply means your redundancy could be taxed. Treat it as a taxable and welcome bonus and you will be fine.

brumdaisy

tax evasion huh? Darn I guess that does't come under 'legit' Mind u, just been checking out what benefits i might be entitled to (back to student days!) and Im entitled to nowt for 9 months so I'd be betteR off with a stint in the clink for tax evasion - dont u get Sky in there these days?!?

rotty

the limit for tax free redundancy is £30k

brumdaisy

Ta rotty

I've spent a great nite on the net reading all about tax free redundancy and exemptions Zzzzzzzzzzzzzzzzzz like losing ur job isnt bad enuf:-(