Can someone please advise me re PILON?

kateab

OK, so 1st January, I TUPEd to a new employer.

In March, I asked them to make my job redundant. (tbh, I am surprised they didn't do it as part of the transfer but they say they couldn't do anything for 6 months but I lost patience along the way). They agreed and we signed a compromise agreement.

The solicitor that represented me (at their expense) told me that PILON, if not a contractual entitlement, can be paid free of tax and NI. He therefore requested that my PILON was paid as such.

My new employers said no - they were caught by custom and practice and HMRC insisted they deduct tax and NI for any PILON payment tha they made.

My contract from my former employers didn't state that payment would be paid in lieu of notce - only the notice period they would give if my contract was to be terminated. Could I therefore challenge HMRC regarding the deduction of tax and NI and say that that contract transferred with me and under TUPE, I can't suffer any detriment? If they were to repay my tax, it would make a bit of a difference as it is a few hundred quid!

kateab

Debt_Free_Chick

kateab wrote: »

My new employers said no - they were caught by custom and practice and HMRC insisted they deduct tax and NI for any PILON payment tha they made.

Yes - that's what employers understand the position to be - that if it's custom & practice to pay PILON, then the employer has to pay it in the same way as normal pay and apply PAYE.

My contract from my former employers didn't state that payment would be paid in lieu of notce - only the notice period they would give if my contract was to be terminated. Could I therefore challenge HMRC regarding the deduction of tax and NI and say that that contract transferred with me and under TUPE, I can't suffer any detriment? If they were to repay my tax, it would make a bit of a difference as it is a few hundred quid!

Yes - you can. But I doubt you'll get anywhere. I have a feeling it's already been challenged and the ex-employee lost the case, hence employers tend not to "muck around" unless they are crystal clear about their obligations.

kateab

Thanks for that. I'll probably ask when I ring the tax office on another matter and see where it goes.

kateab