Is PILON taxable

GAILEY

If PILON is stated by employer to be part of exgratia settlement is it taxable?

It is purely statutory notice (ie. not simply contractual) - does this matter?

Hoping someone knows the answer - as it is very confusing

Debt_Free_Chick

I'm confused too.

PILON is usually pay in lieu of contractual notice i.e. the notice that your employer has to give you, as described in your contract, in order to end your employment. PILON isn't generally considered to be "statutory notice"

Whether or not it's taxable depends on what's in your contract and what is custom & practice i.e. what your employer usually does in these circumstances.

Can you give us "the whole story"?

LittleVoice

Statutory minimum notice period is contractual (ie part of your employment contract) unless there is some longer period specified in the written particulars.

If the written particulars are silent regarding the right of the employer to pay you instead of giving you notice, then PILON appears not to be contractual and therefore it is not taxable. However, it can be argued that if your employer generally pays PILON rather than giving notice, then it is contractual "by custom and practice". Do you know of other people who have been paid PILON in previous years?

kazmc

Basically in laymans terms if PILON is mentioned in your contract of employment it is taxable, if it isnt mentioned its not taxable. HTH

GAILEY

Hi - thanks very much for your thoughts.

The whole story is that OH made compulsarily redundant and he's got a notice setting out his entitlement, which says:-
12 weeks notice (which is what stat notice would be)
stat redundancy payment
ex gratia payment
I wrote to his employer to ask about the notice and was told it was included in the amount e had been quoted as the ex gratia. They sent us the book that is agreed terms with the trade union and it doesn't talk about PILON at all.

His ex gratia is over £30, as he has lots of years service, so does that mean whether its notice or whether its comp it will still be taxed.

Also (sorry - so many questions) - he's signed on the dole for contrib based JSA - will he now he knows that that is PILON sign off until the notice period would have ended..

Hope that makes sense??