Redundant and pay-off

1984ReturnsForReal_2

kiddy_guy wrote: »

What about consultation processes? Anyone? Surely they should have followed this process. Also the OP is getting PILON to cover the notice period, but what about the payment for being made redundant. It sounds like the employer is paying the OP for their notice period, but not for the redundancy?

Unless its in their contract they are not entitled to "redundancy".

It sounds like the company only has to pay the notice period.

If he gets another 2 months on top of this its a bonus especially if he isnt deducted tax.

Its interesting that the 21 months & the 3 months work out to 2 years. This makes me think that after 2 years he is entitled to a great deal more....

rikbar

Hi there,

As far as I am aware you will be taxed on the notice as it forms part of your contractual salary whether worked or not, in some cases if PILON is not included in your contract it can be non taxable. With regards the 2 months ex gratia payment you should not be taxed, as it does not form part of your agreed payment for services or contractual reward etc. You need to confirm all of this with your HR department.

I can't see, per 1984's comment, that you would be entitled to any more just because the payments magically take you to 2 years, as service is determined by your dates of employment. The extra 2 months wage are in addition to your salary to date and do nothing to increase you length of service. Indeed stat redundancy for 2 years service would be less than you are being offered now, by my calculations.

I hope that you find a new job soon and things work out

Rikbar

getmore4less

Atelier wrote: »

I believe any additional payments made might be taxable depending upon how the company treats them.

If it has a redundancy policy defined within your contract of employment then any values specified here would be tax free and any above and beyond those specified would be taxable.

e.g. if your contract of employment specifies that you will get just the statuatory redundancy pay then this ex-gratia payment will be taxable.

just about any payment not contactual salary is tax free up to £30k.

So in some cases PILON can be tax free.

The maximum stat redundancy is £10500(1.5wpy*20y*£350cap) so it is clear that more than this can be tax free with a £30k limit


If they have said this is redundancy then they should have followed process, since you have more than 1 year service they probably should have consulted and not just said you have gone so you may still have a claim and could ask for a comprimise agreement with more money to keep you quiet

jazzyman01

Less than 20 employees to be made redundant = no legal timescale on consultation. However, dismissal on the same day does not indicate there has been any "meaningful" consultation.

PILON can be paid tax free but only when silent in the contract. This is not the case here.

I would definitely ask HR to make the exgratia payment tax free. It is linked to the fact your job is redundant so they can make it a redundancy payment. They can put in caveats that should tax and NI be deemed payable in the future then you would be liable for the employee portion so I do not see how this can affect them.

Final note - if your car is part of your job and is clearly defined as a tool to do your job (ie if you are off sick for a long time, parental leave etc) and can be removed at the request of the Company then you would probably not be entitled to the use of it during your notice period. Did they include this as part of the payment?

mighty_rhinos

Just a quick note to thank everyone for your advice. Heard yesterday that my former employer is paying one month + outstanding holiday subject to tax, but other two months will be tax-free as ex-gratia payments. Car is unaffected and remains with me until month-end.

Thanks to everyone, whilst I'm looking for a job that tax free element has just given me the equivalent of an extra month's wage during the job-hunting time! :T