Client has deferred his State Pension past his 65th birthday in 2013 as he was and is a higher rate taxpayer. A large lump sum could be claimed. He is now going to stop trading and sell his surveyor's practice. He is a generous man and would wish to reward his staff with a sizeable bonus in addition to their redundancy entitlements. I have explained that the tax that would apply to the lump sum would depend upon his tax rate. He has a number of Gift Aid payments and if his income were no longer taxable, HMRC would demand 20% on these. It is my belief that this 20% is NOT his taxable liability but a clawback of the tax deemed to have been deducted from any Gift Aid payments. As such, I would not expect the lump sum to be taxable if his income was less than his allowances. What do others think?