Taxable or non taxable pay after redundancy

Dollywood

Hi All,

Wondered if anyone can help. The office I have been working in was closed on 5th November making all 9 of us redundant immediately. I am not entitled to redundancy pay because I have been there less than 2 years as stated in my contract and have received a full week's wage for what I had already worked, plus 2 weeks PILON and commission owed to me. I have been told mixed info on whether my PILON pay is taxable or not and just wondered if anyone can advise on this? My contract does not mention PILON at all and just states the notice period required by both employee and employer.

Any advice is greatly welcomed!!

bryanb

Your pay is taxable, Even pay in lieu. However you may be due a refund if you don't find work soon.

Dollywood

Thanks bryanb,

I've got a new job to go to on 5th Jan but not much temp work happening where I am at the moment so claiming Job Seekers Allowance. I presume that I'll just have to write to HMRC with my tax info and see if I'm owed anything?

honeypop

You can call your local tax office when you receive your P45 and they will work out for you whether you are due a refund on the tax. This is what they told me in similar circumstances. Sometimes though, she said, it is necessary to wait until the end of the tax year (April) to see if any refund is due, this normally applies if you were out of work inbetween the job you were made redundant from and your next employment.

Use this website to find the relevant tax office http://search2.hmrc.gov.uk/kbroker/hmrc/locator/locator.jsp?type=1

LittleVoice

It used to be that as long as there was no contractual right to pay in lieu of notice then PILON was in fact "damages" and not subject to tax and NI.

This may have changed but I wouldn't give up hope that it can be tax free yet.

Dollywood

Thanks for your replies everyone, I'll give my local tax office a call and see what they say as I've now received my P45.

Would rather the money in my pocket than in Alaistair Darlings!!!