Institute of Certified Bookkeepers
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Confused between ETP Tax Free & Redundancy (Lump Sum D) categories

  • Member in Employment
  • 3 posts
  • # 118684

Hi Everyone,

 

I have recently made two redunancy payments which I am confident are calculated correctly, however I am confused with the use of payroll categories and how they will report on the income statement at years end. The redundnacies have resulted in no tax payable on the genuine redundancy component due to coming in under the threshold. I put this to the ETP Tax Free payroll category but the more I read I think it should go to Redundancy and be reported under Lump Sum D. I think that ETP Tax Free is more to do with Invalidity or pre 1/7/83 component. Can someone clarify for me please?

Cheers

Brenda

  • Fellow in Practice
  • Practice Certificate
  • 49 posts
  • # 118695

Hi KrolB,

ICB have an extensive resource on Termination including Redundancies which answers this question. Also a good idea to check with your software company how to process it correctly for STP.

Regards,

Vija

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