If you receive a redundancy or severance payment from an employer, you need to declare it on your tax return as follows.
Example: If you receive a £40,000 redundancy payment, enter £30,000 in Compensation and lump sum exemption, up to £30,000 and £10,000 in Redundancy and other lump sum and compensation payments in EXCESS of £30,000 exemption.
Please note: You will need to remove the redundancy value you have entered in the employment pages to calculate the correct tax.
HMRC Forms mode
Please note that if the redundancy amount has been included within your employment details (such as the P60 or P45), you will need to deduct this from the overall balance which you are declaring on the employment pages otherwise there will be an incorrect tax amount declared.