Tax Rebate After Redundancy

“You are fired” are probably the three words that the average employee dreads the most. And regardless of whether they come with plenty of apology or whether it comes in a terse two-sentence paragraph, the effect is the same: your services are no longer needed in that organization. And that is where your redundancy tax rebate comes in.

Every tax payer in the UK who earns less than £100,000 per annum is entitled to at least £6,475 in personal tax-free allowances. In order to calculate the annual monthly tax payable through the Pay As You Earn system, the annual personal allowance is evenly distributed throughout the tax-year. If you happen to lose your job during the year, it therefore means that you have some of your annual personal allowance that remains unutilized.

To know how much the taxman owes you, you need to calculate the annual tax that you were supposed to pay based on the annual personal allowance, and then subtract the taxes that you paid. The difference is what the taxman should give back to you in form of tax-rebates. If all this sounds too complicated for you, simply get to the Tax Rebate Calculator and let it do the dirt work for you.

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