Redundancy and tax-free question

mighty_rhinos

Hi all,

Looking for some advice if possible. Have posted in "redundancy forum" too as not sure if it direct redundancy or taxation query! Sorry.

I was made redundant with immediate effect yesterday. No pre-warning or anything, I turned up for a regular 1-to-1 review with my manager at head office to be told in front of a witness that my position was redundant.

Given I have been there for 21 months, officially I receive no redundancy payment. However, company is letting me keep company car til end of month and paying 3 month salary as "gesture of goodwill."

I got a letter today confirming the above. I understood redundancy payout below £30K is tax-free. However my letter says my final pay will be 31st July (normal pay day) and all payments will be subject to tax and national insurance.

Does this mean the pay-off they are giving me is not tax-free, or is it not official redundancy as I was under 2 year employment so tax applies?

I think the car and 31st May pay day is due to my sales job. They should give me 1 month notice by contract, but in sales position, so immediate effect and laptop/phone whisked away, escorted off site etc.

Any thoughts on the tax-free or not tax-free aspect?

Thanks

Mudd14

As the payment they are making to you is not a redundancy payment, more a good will gesture then yes it will be subject to tax and NIC