The first £30,000 of redundancy pay is not normally taxable and nor does it attract national insurance, as redundancy pay is simply compensation from your employer for losing your job.
If any of the £50,000 is unpaid wages or a bonus, then that element would be subject to tax and national insurance as normal though.
The car will need to be valued for tax and national insurance purposes. It will then be counted as part of your overall redundancy package and the total would be subject to the £30,000 limit.
So to get a rough idea of how much tax to pay, perform the following calculation:
[(Value of car + £50,000) - £30,000] x your rate of tax (i.e. 20% or 40%)
There are rules with regards to what is exempt to tax and falls within the £30,000 threshold. This calculation will provide you with a ballpark figure for your tax position. But if you have real concerns and would like a more accurate figure, then it would be advisable to discuss the tax position with your employer or you local TaxAssist Accountant.
By Jo Nockels
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