Other UK income 31 - Compensation and lump sums up to £30,000 exemption

If you have had a redundancy payment up to £30,000, after any post-employment notice pay has been taken off, and against which your employer has allowed an exemption on, put the total amount that you received in this box.

If your payment, after any post-employment notice pay has been taken off, is more than the £30,000 limit, you'll have to pay tax on the difference. Put the amount over £30,000 in 'Redundancy and other lump sum and compensation' box, any tax taken off in 'Tax taken off' box and the £30,000 limit in this box.

Example

Chris gets a redundancy payment of £40,000, of that £2,000 is post-employment notice pay. Chris pays tax at the basic rate of 20% so he fills in the boxes on page Ai 2 as follows:

• £10,000 (£2,000 + £8,000) in 'Redundancy and other lump sum and compensation' box
• £2,000 (£2,000 x 20% + £8,000 x 20%) in 'Tax taken off' box
• £30,000 in this box