cheli

cheli

Hi to all,can some help please? I have taken voluntary redundancy, i have worked for my employer for eight years and will recieve the maximum weekly limit of £350.00, 8 weeks +4 totalling to12 weeks pay all in. I will receive a week and a halfs pay for each complete year of employment totalling to £4,200 + i will recive any holiday pay on top of this which i may be entiltled to. Can anyone tell me if i will be taxed on the lump sum of 4,200? As i'm very confused...

fengirl_2

Assuming you have nothing in your contract about redundancy pay, the first £30k is tax free. Holiday pay is taxable.

cheli

What would i need to be looking for in my contract about the redunancy?

trevormax

If in your contract it says "upon being made redundant, we will pay you xx amount of weeks in lue of notice", then this money is a contractual payment and is therefore taxable as if it was income earned (called pay in lue of notice or PILON).

The week and a halfs pay for each year worked is not going to be taxable, but I think (could be wrong) the 12 weeks pay plus remaining holiday pay will be.