Did you know once you have received your redundancy payment from your ex-employer you could still be due a further tax refund?
Every individual who pays tax on a redundancy payment needs to check for Top Slicing Relief in the following year. This relief can only be claimed in the year following receipt of your redundancy payment.
Every individuals circumstances differ however the factors which affect the value of Top Slicing Relief are the average tax paid over the previous 3 years and the tax paid on your redundancy payment. The tax rate paid on a redundancy payment should not exceed the average rate of tax paid by the individual over the previous 3 years.
An employee pays 41% tax on a €15,000 redundancy payment and their average tax rate over the previous 3 years was 16%.
Top Slicing Relief available = €3,750
€15,000 * 25% (41%-16%) = €3,750
The individual in this example would receive a cheque from the Revenue Commissioners of €3,750.
Top Slicing Relief is often a relief over looked by tax payers. If you paid tax on a redundancy payment in the past 4 years it is vital to review your redundancy tax paid for Top Slicing Relief.
Contact us on 026-21019 or firstname.lastname@example.org to ensure you receive all tax refunds available to you.