When is tax deducted in each tax year?

PAYE was deducted from my redundancy payment on 31st Dec 2007. Can I claim back before end of this tax year?

• I am now no longer employed. Redundancy payment takes me well into the 40% bracket. Surely the tax is not due until the end of the tax year and I should be able to get a refund that ...show more

• Answer:

  Sorry to disillusion you, but Schedule E tax (PAYE) is taxable on a receipts basis, ie. when the money is received. On redundancy, you are allowed £30000 tax free, after that it is at your top rate of tax. This would have been calculated at your date of leaving. You do not say what you will be doing for the rest of the tax year (until 5th April). If you are looking for work, you may not know. If you sign on for jobseekers, that office will make any refund due to you, either at 5th April or when you sign off, whichever is soonest. If you get jobseekers, you will not be using all your tax allowance. If you are not getting jobseekers, when you get to the end of January, you can download Form P50 from www.hmrc/paye, and send it to your tax office with form P45, who will make an interim refund. This can be done every four weeks thereafter, until the end of the tax year. If you get another job, it is likely that the tax will remain due, and your new employer will operate on a cumulative basis. Are you sure the payment you received is actually redundancy? Sometimes employers make a payment in lieu, it all depends on the contract of employment you had. Tax is this situation isn't always due, as the employer is, in effect, making you a gift/compensation.