Originally Posted by
Common_Sense
How do we expect the tax situation to work if the service leaver suddenly receives money (pension) above their current income from their new employment? Surely it won’t be taxed at the 2023 months income tax rates as additional income?
I assume (naively) that because it is clearly identified as money that has been "illegally" withheld, as opposed to a change of policy, that it would be taxable for the years it was supposed to have been paid. Likewise for the pension fund "jump" which would likely exceed the annual threshold, clearly it hasn't been accrued magically in one year - it was always there, just being withheld.
Obviously that would be the right and decent thing, so I think we can all assume the opposite will happen and watch HMRC tax it at the highest rate of interest possible....