§ Mr. Kinnock
asked the Chancellor of the Exchequer what is the basis of income tax liability calculations on redundancy payments; and how much tax, using these calculations, would be paid on redundancy awards of £6,000, £8,000, £10,000, £12,000 and £14,000, respectively.
§ Mr. Robert Sheldon,
pursuant to his reply [Official Report, 24th February 1978, Vol. 944, c. 841], gave the following information:
Redundancy payments are taxable on the excess over £5,000, or, if the payments are made ex gratia, on the excess over the greater of £5,000 or the "standard capital superannuation benefit"—o broadly the equivalent of the lump sum which could have been paid tax free under an approved superannuation scheme. The tax on the excess is limited to six times the amount which would have been payable if only one-sixth of the excess had been chargeable and there had been no earnings in the year, other than the redundancy payment, from the terminated employment. The amounts of tax payable would vary, not only with the amounts of the payments, but also with the recipient's tax allowances and with other income he received.