Timimg of redundancy pay

fred_karno

If you are made redundant and receive either statutory redundancy pay, or a better version with larger ex-gratia payment, the first £30k should be tax free. Assuming the payment meets the criteria ( I know there are hoops to jump through and it cannot include holiday pay, PILON etc.), does it matter when it is paid? If you are working out notice period, can the company pay it during that period or does this make it taxable? In other words, if you get the money whilst working out your notice period is there a danger that the tax man will demand a slice of it?

MikeyBhoy

Fred,

I'll have a stab at this. Your company should only pay your redundancy money once you have left employment with the company. It should not be paid while you are still working for them. If, for whatever reason (and I can't think of a valid one), it was paid before you parted company with them, the 30K tax free element could be challenged by HMRC.