Share this content
0
6
11045

Redundancy and self assessment

Does anyone know where (if anywhere) i woul;d put statutory redundancy recd by a client on his tax return??
AJ

Replies

Please login or register to join the discussion.

avatar
03rd May 2007 20:46

But..........
what if that employer happens to pay compensation to a controlling director of a Limited Co?
Some thing tells me that wont work?

Thanks (0)
avatar
04th May 2007 10:55

Redundancy and self assessment
Controlling directors are not entitled to redundancy payments

Thanks (0)
avatar
By frauke
01st May 2007 16:13

Redundancy
Take a look at this link

http://www.hmrc.gov.uk/helpsheets/ir204.pdf

Everything you need to know is explained there

http://www.thesipp.org.uk

Thanks (0)
avatar
04th May 2007 12:15

statutory redundancy payments.
If a director of a company is an employee then he or she is entitled to a statutory redundancy payment if employed for at least two years. Such an employee/director is also entitled to any contractual redundancy payment too. A managing director or director of a company who has executive responsibilities may claim if he/she has a service contract but in Buchan v Secretary of State for Employment (1997) it was held that a person who is a controlling shareholder of a company is always able to block her/his dismissal and, therefore, cannot be an employee for redundancy payment purposes. A worker with the label of 'self-employed' may, in fact and law, be an employee and, if employed 2 years plus, may also be entitled to a statutory redundancy payment.
www.employment-law-expert.co.uk

Thanks (0)
avatar
02nd May 2007 18:50

statutory redundancy payments exemption from tax
Any payment that is received 'in connection with the termination of a person's employment' is chargeable to income tax to the extent that it exceeds £30,000: s.403 and s.404, Income Tax (Earnings and Pensions) Act 2003.
This means that termination payments of up to £30,000 (including redundancy payments) are exempt from tax if the employer genuinely and voluntarily made such a payment as compensation for loss of office or employment.

Thanks (0)
avatar
03rd May 2007 09:08

Redundancy and self assessment
Assuming it is less than £30k then it should be entered in box 1.24 on the back of the Employment Pages.

If there is an amount in excess of £30k then box 1.29 should be used to enter the excess.

Thanks (0)