SMP in lump sum (due to redundnacy)

[Mummy Bean]

Has any one had the SMP paid to them in a lump sum? If so what were the tax implications?

I have (hopefully) been offered redundnacy, but when I spoke to HR they want to pay me my SMP in one lump sum, which i thought brilliant! but after further looking on the internet it seems i will get a much higher lump of tax/Ni.

What i am trying to work out is how much more tax? and am i able to claim any of it back after the tax year ends?

When i had my son he was born on April 4th so the begining of the tax year, so i didnt get any tax on my SMP. as it was within my £10k tax free element.

ARGH TAX is soooo confusing.

 

[Abz1982]

If you still take an entire year off and that is your only income then you will be able to claim the tax back - but not until next year I think.

 

[smileyfaces]

Call hmrc they will know...but id guess you would defo be able to claim your tax back

 

[ngozi79]

I looked into this, as I am in the process of accepting a compromise agreement to coincide with my maternity leave.

From what I understand, you (and your employer) may end up paying slightly more NI on the lump sum. Even if you do end up paying more tax on a lump sum, the amount you pay over the whole year will be calculated against your tax code and if you have overpaid, you will get some back.

Having been given the option for a lump sum or payment of SMP as if I was returning to work, I went for the latter but only really to help me manage my money better.