Top Rate Slicing or P21

F

Flake

Guest
Hi,

I'm wondering if I should apply for top rate slicing or p21 balancing statement.
I got a redundancy package in the middle of the year last year. I was told that I could apply for top rate slicing in 2011. If I understand correctly that takes my average % tax for the last 3 years and applies to the lump sum received. Is this my average tax rate or myself and my husbands?
I haven't worked since being made redundant so looking at my figures in PAYE online if I apply for a balancing statement now I should get all of the tax paid on my lump sum back. Would this be more beneficial to me than applying for top rate slicing?

Thanks
 
You should apply for both. Top slicing relief operates in addition to your usual entitlements as per P21.

Top slicing relief is calculated by reference to your own income, not your spouse's income.
 
Thanks for the reply, OK does that mean then that I apply for top rate slicing and say they determine I should have paid 2K tax so they refund me the rest and then they add the 2K to the rest of tax paid this year and do balancing statement on that? Does that sound right?
 
Flake said:
Thanks for the reply, OK does that mean then that I apply for top rate slicing and say they determine I should have paid 2K tax so they refund me the rest and then they add the 2K to the rest of tax paid this year and do balancing statement on that? Does that sound right?
Click to expand...

Sorry, I don't really know what you're getting at? Revenue will normally process top slicing relief and p21 position together. They certainly won't issue a top slicing refund without determining whether a P21 tax liability exists for the same year.
 
I'm probably not understanding it correctly or explaining it correctly

When I logon to paye online I have my income for this year which includes my redundancy lump sum and the tax I paid this year which include tax@42% on my lump sum. Doing my calculations I should have paid less tax this year by more than the tax I paid on the lump sum based on myself and husbands credits. I suppose what I'm wondering is if I apply for top rate slicing I am thinking because its based on 3years I will get less of the lump sum tax back.
 
Yep, im confused too. Perhaps go see your accounatnt or PM me if you are in Leinster.
 
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