top slicing

i have a quiry on top slicing/paye. if i get a redundancy payement in july i can apply for top slicing in the new year (2012). however if i start a new job in (2011)august or september ,how will this effect the top slicing due in the new year,and will i pay top rate tax on my new job.(at present on low tax band).

so far the advise i have is because of the lump sum paid for redundancy in 2011 july,any new job in august 2011 will incur tax at 41%,but the top slicing applied for in 2012 will not be affected..can anyone add to this thanks.

Ok so Tax works on a cumulative basis over the course of a year.

Your paid your weekly/monthly salary and then at the end of July you receive a taxable lump sum (statutory redundancy is exempt Along with an exempt portion) which will push you into the higher rate.

You are entitled to if single 32800 pa / 2733 pm at the standard rate. This is availble to you for the rest of the year.

If at the end of the year you have still suffered higher rate tax on the lump sum and your average is lower than that the TSR is available.

ok i understand i pay tax at the low rate,but on receiving a redundancy package i will have to pay it mostly at the high rate. if i start a new job i have my usual monthly tax credits till the new tax year. so when the new tax year arrives i can apply for top slicing and will be back to my normal tax at 23%. i dont understand your last sentance at all, what im trying to clear up is ,if i start a new job in 2011,i will be paying high rate tax until the new year, and in the new year my tax rate will return to normal low tax, i can then sort out my top slicing with revenue.

tsr

The main tax to look at is your paye tax at the standard 20% rate and the higher 41% rate.

You need to check the p45 you got from your employer when they paid the lump sum to you.

This will have your total taxable pay for your salary up till July when you finished work and include the taxable portion of your lump sum.You would have to add any taxable social welfare income you receive since you finished work to your taxable pay amount.
The p45 will also show your annual tax band allowance (aka 'standard rate band' or 'standard rate cut-off').

You can compare this total taxable pay amount with your annual tax rate band allowance for the whole year. If your annual allowance is more than your total taxable pay up to July, then the difference is how much you can earn for the rest of the year at the standard 20% rate. Anything you earn above this amount would be taxable at the higher 41% rate.

prsi and universal social charge would also apply.