The coronavirus pandemic has had a dramatic impact across the UK; tens of thousands have sadly lost their lives to COVID-19 according to government figures and millions are feeling the financial impact of the outbreak. Following the UK lockdown being announced in March 2020, the UK Government rolled out a number of emergency schemes including the Coronavirus Job Retention Scheme.
Under this scheme, 9.6 million jobs were furloughed.
Following a number of changes to the scheme, it will draw to a close next month, ending on October 31, 2020.
Unfortunately, some Britons having already been made redundant following the COVID-19 crisis, with others expecting redundancy announcements to come.
Jonathan Watts-Lay, Director, WEALTH at work – a specialist provider of financial education and guidance in the workplace – commented on the topic of redundancy.
“Redundancy can be a very difficult time and can be made worse if people don’t know their options,” he said.
“Some people don’t know that some of their redundancy pay will be taxed, while others don’t know what their monthly expenses are and therefore how long their redundancy pay needs to last if a new job isn’t round the corner.
“Whilst paying off expensive debt may not be something that springs to mind, it can take the pressure off, and stop the debt from building up even more.
“Financial education and guidance offered by employers can really help employees to look at the bigger picture, and work out what steps they need to take.”
Tommy McNally, founder of the free Tommys Tax App, is a specialist on claiming tax refunds, and has explained that those who are being made redundant may be due money back.
“Most people don’t realise that if they’ve been made redundant, they’re almost certainly due a significant tax refund,” he said, adding that he’s seen clients getting payments of £3,000 on average.
“That’s because tax is calculated on your estimated earning for the year on April 1 divided into 12, so if you were made redundant at the end of August, you’ve earned less than half the amount that HMRC has taxed you on.”
For those who want to claim back a refund themselves, Mr McNally shared his expertise.
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Mr McNally went on to explain that taxpayer isn’t required to claim in order to get the tax refund.
“HMRC will probably, eventually give it back,” he said.
“But to hurry that process along or claim an additional tax refund for things like job expenses you can claim it back yourself.
“To do that use the official website and form [found at GOV.UK’s “Claim a tax refund” section].
“Make sure you work out what you’re owed first,” Mr McNally suggested, and added people should “have everything in front of you, particularly your payslips and the expenses you’re claiming”.