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Returning to same company after redundancy.
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# 1
Jibbah24
Old 03-02-2009, 12:01 AM
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Default Returning to same company after redundancy.

Hi..

I'm currently half way through my 4 week consultation period and was curious as to what the situation is with regards to tax should I accept the redundancy package on offer and then return to the same company within a month or so in a different role.

My current job is being axed but I am ever hopeful that I may be able to slot back in in another department where my skill set would fit nicely.

I know the first 30k of the redundancy payment is tax free but would the tax man be after a chunk of this should I be back on the payroll in the very near future?

Is it better to try and return on a contractor basis?

Thanks in advance for any/all advice!!

PS: I have been reading through a lot of the emails, and on behalf of all those who are posting their queries I would like to say a big thank you to those of you 'in the know' who are helping to guide us through what can be a very difficult time!! Much appreciated!!

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# 2
Jibbah24
Old 04-02-2009, 11:08 AM
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Hi all..

Just had another conversation with the company who have asked whether I would be interested in returning to work for them in the future as they are expecting to have some new roles that would suit my skill set. When i asked about how this would effect any redundancy payment they were a bit hazy but said they would expect me to pay back a certain amount of the package depending upon how long I had been away.

I've never heard of this before......? Can they do this and would they need to add this as a T&C in the redundancy package.

Thanks in advance...
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# 3
LittleVoice
Old 04-02-2009, 7:49 PM
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I don't think it is for them to start claiming back redundancy payments. It would be like charging you for your job offer. Perhaps asking them about how returning to them could affect the redundancy package made them think they could do something along these lines. The tax question would be between you and HMRC and not them. (But I don't think HMRC would have any additional/further interest in that payment if it was not due to be taxed when it was paid - ie if it was not contractual.)
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# 4
reheat
Old 05-02-2009, 12:59 PM
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If you had been made redundant and re-employed into a new role in the same company, I'm pretty sure HMRC would require strong evidence the same could not have been achieved simply by reassigning you to the new role without you ever leaving the company. This of course is what many companies strive to do anyway during redundancy periods, in order to minimise job losses.

If this did happen, you would need a very clear written from the company when being re-employed that you got to keep your redundancy money, though you would probably have to pay the tax on it.

I got something slightly different. Made redundant, then doing self-employed contracting back to a different department in the same company, where my product knowledge still useful to them.
Favours are returned ... Trust is earned
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# 5
Simran
Old 05-02-2009, 2:35 PM
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Default re-engagement

Depending on how soon you were re-engaged after redundancy and the reasons for the redundancy & re-engagement, HMRC may seek to challenge the tax free treatment of the original redundancy payment - if you left under redundancy, knew of the potential opportunity for "re-employment" and returned soon afterwards, they may take the view that a genuine redundancy situation did not occur and what has happened is equal to a change in your terms & conditions of employment. You will need to be able to demonstrate that the redundancy was genuine (within the legal definition of redundancy), you knew nothing of the "new" opportunity at the time of redundancy and that there were genuine commercial reasons for the re-engagement.

If HMRC decided that a genuine redundancy did not occur, they will seek the PAYE which the employer should have deducted from the employer, together with interest and penalties. In this scenario, if the employee wants the job continuity, it is not uncommon for the employee to agree to pay back part of the payment or agree to pay the tax benefit back, but if this was the case, it is worth asking the employer to treat the re-engagement as a continuing employment for entitlements purposes. If the employer wants the employee badly, they may be willing to provide a guarantee (on request) to the employee that they will pick up the tax bill on behalf of the employee should HMRC decide that it was taxable.
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# 6
reheat
Old 06-02-2009, 7:22 PM
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Quote:
Originally Posted by Simran View Post
If the employer wants the employee badly, they may be willing to provide a guarantee (on request) to the employee that they will pick up the tax bill on behalf of the employee should HMRC decide that it was taxable.
In writing of course!
Favours are returned ... Trust is earned
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# 7
Jibbah24
Old 08-02-2009, 8:11 PM
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Thanks all...plenty to think on and will see how things pan out!
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# 8
Jules
Old 09-02-2009, 8:18 AM
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I know when I was made redundant (gov dept) if I was re-engaged in a gov dept within 12 months I would have had to pay all my lump sum back. Mind you I had no intention of going back.
Debt at highest May 04 - 65,639.22 - Started DMP with CCCS 1st June 04
Debt now 24th December 2013 35499.31 Paid Off to date 30139.91 - just not going quickly enough!


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# 9
indykalsi
Old 17-11-2011, 7:21 PM
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Default Re-Employment with same company after voluntary redundancy

Hi -

Following on from this................

I took VR with a very large company that I worked for in November 2009 and received a tax free sum at this time.

I have since applied for a different role to the one i was originally doing with the same company and had a 1st stage interview which I was successful in and able to progress to the next stage.

The day after I received a telephone call from a member of the HR Resourcing stating that as I had previously worked there and taken VR, that there is a possibility that they may not be able to progress my application and that it would need to be referred to the HR Business Partner (higher management). Today I have received a call stating that "Due to tax implications they are unable to take my application further" and that was as far as they were prepared to discuss the matter. I have asked for this in writing via email (which they have not sent) and i have been given the name and contact details of the HR Business Partner but have not been able to contact yet.

I must also mention that I am currently working at this organisation as an agency worker (in an unrelated role).

As previously mentioned I left on VR 3 years ago and left on a very positive note, in fact my previous boss has mentioned that if a role becomes available in her department that she would hire me in an instant.

As 3 years have elapsed since the VR what are the tax implications, if any? and where do I stand in this predicament, what are the options? How/Can take this further? Does this mean i can never work for this organisation again?


It is a very good organisation to work for, I enjoyed my time there previously, I currently enjoy working there and would very much like to work there as a permanent employee in the future.

Any/All advise will be greatly appreciated.
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