Jack’s Empowerment and Inspiration: 69. TAX MATTERS - Jack’s Redundancy Empowerment - empowering redundant workers - empowering redundant staff - Jack Lookman

Sunday, 30 November 2025

69. TAX MATTERS - Jack’s Redundancy Empowerment - empowering redundant workers - empowering redundant staff - Jack Lookman - Ola Carew

69. TAX MATTERS - Jack’s Redundancy Empowerment - empowering redundant workers - empowering redundant staff - empowering redundant employees - making redundancy work for you - is redundancy a dead end? - is redundancy the end of the road? - making the most of redundancy - empowering the redundant worker - Jack Lookman - Rita Nnamani - Olayinka Carew - Ola Carew - Jack Lookman Limited - Amebo - Ire o - Ire kabiti - Empowerment and Inspiration - Empowering And Inspiring Generations - Yinka Carew - Olayinka Carew aka Jack Lookman - Jack’s Empowerment and Inspiration

Tax becomes a major source of confusion after redundancy because many UK workers are navigating unfamiliar territory. Some are dealing with redundancy payments. Others are switching to freelance or contract work. Others are claiming benefits while job hunting. Understanding tax matters helps you avoid penalties, reclaim money you are owed and reduce stress during an already overwhelming period.

The first thing to recognise is that redundancy pay is treated differently from regular salary. The first £30,000 is usually tax free in the UK. Anything above that amount may be taxed, depending on how your employer processes the payment. Some workers find that too much tax was deducted because the payment fell into a single month’s payroll. HMRC allows you to reclaim any overpayment, but you must check your tax code and act quickly. Many redundant employees are entitled to refunds without realising it.

When transitioning into temporary, freelance or contract work, the tax responsibilities shift as well. You may need to register as self-employed with HMRC, keep accurate records of income and expenses and file a Self Assessment tax return. This can feel intimidating at first, but modern accounting tools and HMRC’s guidance pages make the process more manageable. The key is to track everything from the start. Keep receipts. Keep invoices. Keep notes. Staying organised saves stress later.

If you are job hunting and receiving benefits such as Jobseeker’s Allowance or Universal Credit, these do not typically create complicated tax obligations. What matters is understanding how any new income affects your entitlement. Speaking to a benefits adviser is often helpful because they can explain how part-time work, contract roles or business earnings interact with your benefits. Avoid making assumptions about what you can or cannot earn.

Pension contributions also become relevant during redundancy. Some workers choose to leave their pension where it is. Others transfer it. Others prefer to pause contributions until they regain stability. Understanding your pension options helps you avoid unnecessary fees or long-term losses. A free session with a pension adviser or services like Pension Wise can make a huge difference.

If you pursue entrepreneurship, you may be entitled to claim certain expenses such as equipment, software, home office costs, travel and professional services. These legitimate expenses reduce taxable profit and help ease the financial burden of starting a business. Many first-time entrepreneurs avoid claiming expenses out of fear, but HMRC is clear about what is allowed. The goal is not to hide anything but to claim what is rightfully yours.

Finally, it is wise to plan for tax rather than react to it. Setting aside a portion of every payment you receive, whether freelance income or business revenue, protects you from sudden tax bills. Redundancy is already emotionally stretching. Removing tax surprises makes your financial recovery smoother.

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