I hope to retire shortly (aged 61) after 35 years with the same employer. My employer wants to give me a gratuity of £20K. Will I have to pay full tax on this? If I do, I presume my best option would be to get my employer to make an AVC payment into my DC pension. Someone suggested redundancy to me but I think that would cost my employer a lot more than £20K due to my long service. I phoned Revenue's PAYE helpline today but they weren't able to help me. Any advice much appreciated.
Thanks, Joe. One more question, if I may: I have been asked to come back after retirement for two days per week. The post would be technically slightly different to my present one. I'm considering doing this for a short period - would I still qualify for the above exemption? Thanks again.
Can be done, best situation is where you can show it is a different role.
Your employer is required to notify Revenue of the termination payment so it may come to Revenue attention when you are re-registered.
Your employer could write to Revenue setting out previous role and proposed new role including the new contract terms and seek approval.
Else you could contract your services to the company rather than become an employee.
Can be done, best situation is where you can show it is a different role.
Your employer is required to notify Revenue of the termination payment so it may come to Revenue attention when you are re-registered.
Your employer could write to Revenue setting out previous role and proposed new role including the new contract terms and seek approval.
Else you could contract your services to the company rather than become an employee.
Just for the avoidance of doubt - is there not a risk that this approach could fall foul of the Revenue - i.e. not truly satisfying the independent contractor test?