Working your notice tax question

oilburner_2

hi,
hoping someone can help

The company i work at has announced compulsary redundancies but has said it will take volunteers if possible

I have said i would like to be considered for the VR as it is an enhanced package and i have a lot of years service
The company has said when they serve notice the majority of people would be able to leave straight away

They have said I would have to stay and work my notice if was allowed to leave because of the job i have.

As I see this I would be working for nothing if other have already left with the notice payment

I have asked this question and the company has said all earnings worked on my notice would be TAX FREE as you only pay tax on notice not worked. My lump sum would be over £30,000 so I would pay tax on everything over that?

Is this a tax loop hole so i can get over 30,000 tax free or are they telling me incorrect information

this is just too complicated

appreciate any advise
thanks

Valli

Your colleagues would be getting PILON (payment in leiu of notice) .

You however would NOT be getting this payment as you would be working your notice. I beleive (but I may be wrong) that the payment YOU receive would be taxable as it would be earned income. I would assume you will have to pay tax on your earnings. Would your redundancy package be enhanced at all?
I shall watch this thread with interest!

oilburner_2

my package is enhanced in the fact that i would get a nice severance sum

but the notice payment is 13 weeks and this is the part where I don't want to work this if others have left striaght away and I would be working for nothing if it is not tax free as i have been led to beleive

thanks

Rigel

I can't really comment on your question, but just a few other points,

oilburner wrote: »

The company has said when they serve notice the majority of people would be able to leave straight away

They have said I would have to stay and work my notice if was allowed to leave because of the job i have.

As I see this I would be working for nothing if other have already left with the notice payment

The company made it clear that some people could leave and others couldn't, the needs of the business and all that. You obviously have a different job than the other people so you shouldn't expext the same treatment as the other people. They are getting a 'perk' by be allowed to leave straight away but unfortunately your job doesn't allow this - just the way the cookie crumbles. Just be happy that your colleagues have got something good rather than crying because you haven't got the same.

oilburner wrote: »

my package is enhanced in the fact that i would get a nice severance sum

but the notice payment is 13 weeks and this is the part where I don't want to work this if others have left striaght away and I would be working for nothing if it is not tax free as i have been led to beleive

thanks

You're getting over £30,000 lump sum, in the current conditions you should be extremely thankful that you are walking away from a company with that. Have a smile on your face and look at what you've got rather than whinging because you haven't got a slight thing that others have got.

:beer:

westv

Rigel wrote: »

You're getting over £30,000 lump sum, in the current conditions you should be extremely thankful that you are walking away from a company with that. Have a smile on your face and look at what you've got rather than whinging because you haven't got a slight thing that others have got.

:beer:

Well, if we all took that view and were just grateful for what we had rather than trying to get a better deal then were would the MSE site be?

oilburner_2

Rigel wrote: »

I can't really comment on your question, but just a few other points,





You're getting over £30,000 lump sum, in the current conditions you should be extremely thankful that you are walking away from a company with that. Have a smile on your face and look at what you've got rather than whinging because you haven't got a slight thing that others have got.

:beer:

thanks for the reply.

I am not whinging i realise it is a very good package and I am smiling about the amount. I just like to know my rights. At the end of the day if you are without work every penny helps

LittleVoice

oilburner wrote: »

hi,
I have asked this question and the company has said all earnings worked on my notice would be TAX FREE as you only pay tax on notice not worked.

That's the wrong way round.

You work and get paid for the work - taxed.

You don't work but get paid any way (pay in lieu of notice) - not taxed (provided it is not in your contract of employment that this is an option for the employer to operate and it has not been the customary practice)

Rigel

westv wrote: »

Well, if we all took that view and were just grateful for what we had rather than trying to get a better deal then were would the MSE site be?

Yes, I see the point, but I also see a difference in 'trying to get a better deal' and 'trying to change the deal'. The company made it clear that certain people would be able to leave straight away while others wouldn't.

oilburner wrote: »

thanks for the reply.

I am not whinging i realise it is a very good package and I am smiling about the amount. I just like to know my rights. At the end of the day if you are without work every penny helps

Yes, that is true, every penny does help. The job situation is pretty dire at the moment, but hopefully things will pick up in the new year

I wish you well in your quest for new employment.

:beer:

McKneff

Of course you wouldnt be working for nothing, You would be paid for the work that you do.

Your colleagues who have left have actually got the bonus of not having to work their notice.

Each situation/person is different.

jazzyman01

If your redundancy payment is over £30k then you would be taxed anyway.

Please note that it is up to the company whether to accept VR and to decide when it can let you go.

westv

Does anybody know how long the tax free limit has been £30,000? Seems quite low considering it's to compensate someone for being thrown out of their job.

Edit: I see it's been since 1988!! That is amazing.