From LADbible · · 1m 10s
Man loses £5500 from redundancy payout after UK tax trap
Man loses £5500 from redundancy payout after UK tax trap.
In brief
Man loses £5500 from redundancy payout after UK tax trap. Clive Illenden lost £5500 from his redundancy package after his taxable income exceeded £100,000, triggering a tax threshold anomaly. Originally reported by LADbible.
Tax threshold anomaly
Clive Illenden lost £5500 from his redundancy package after his taxable income exceeded £100,000.
Clive's retirement plan
Clive planned retirement at 57 after 20 years as legal and business affairs manager.
Redundancy payment timeline
Company paid redundancy at end of financial year on 31 March, not diluted through pension schemes.
HMRC bill shock
Clive received £5500 bill from HMRC less than a week after receiving redundancy payment.
Tax calculation explanation
Clive's salary plus taxable redundancy exceeded £100,000, losing personal tax allowance.
Tax expert advice
Emma McDermott explains tax threshold: lose £1 allowance per £2 over £100,000.
Tax impact on income
Earning £100,000 triggers £27,432 tax, rising to £33,432 at £110,000.
Childcare impact
Parents lose 30 hours free childcare monthly if one earns over £100,000.
Clive's side hustle
Clive's YouTube channel grew to 100k subscribers in under a year after tax shock.
The big picture
Clive Illenden lost £5500 from his redundancy package after his taxable income exceeded £100,000, triggering a tax threshold anomaly.
