PAYE74025 - PAYE operation: lump sum termination payments: repayment claim following termination payment
This subject applies where claims are made in the tax year the
lump sum termination payment is made.
For claims made in later years a review of the liability
should be made in the normal way.
A taxpayer might complain that too much tax was deducted from
a termination payment made in the current tax year. For instance,
if PAYE was operated in the normal way at the time of the payment,
tax may have been deducted at rates higher than the overall rate
for the year. This happens particularly when payment is made early
in the tax year.
Where a repayment claim is made, ask the taxpayer for the
following
- Parts 2 and 3 of form P45, if held
- The rate of occupational pension, if received
- Details, including rate of pay, of any current employment
- If not currently employed, is he or she
- Finally retired and not seeking further employment
Or
- Not seeking or taking up employment until after the forthcoming 5 April
Or
- Seeking full time employment
Or
- Seeking part time employment (if so what is the anticipated rate of pay?)
Or
- Started in business on own account or intending to do so
When this information has been obtained
- Make an informal tax calculation in the normal way where the taxpayer has
- Has finally ceased employment, or will not be taking up further employment before 6 April next
And
- Does not get an occupational pension
And
- Does not claim and receive Jobseekers Allowance
- Follow the instructions given in ‘Repayment Claim Following Termination Payment (Action Guide)’ at PAYE74026 in all other circumstances
