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Redundancy Payments

Volume 950: debated on Wednesday 24 May 1978

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asked the Chancellor of the Exchequer what, under present calculations of tax liability on redundancy payments, would be the amount of income tax to be paid by workers receiving £9,000, £10,000 and £12,000 redundancy payments, respectively, who have a wife and no other dependants and a weekly income equivalent to flat rate unemployment benefit.

, pursuant to his reply [Official Report, 22nd May 1978; Vol. 950, c. 419], gave the following information:On the assumption that the weekly income is taxable and received throughout the whole of the tax year, and taking account of the Budget proposals and of the new clause which the Government have tabled for this year's Finance Bill increasing the exemption limit from £5,000 to £10,000, the amounts of income tax payable on these redundancy payments would be, respectively, nil, nil and £66. If the weekly income was, in fact, unemployment benefit, which is not taxable, no liability would arise.