Redundancy payments - or not?

stephenpaul

If an employer incentivises an employee to resign voluntarily, is the payment still a redundancy payment for tax purposes? The employer is stating that6 they are not offering redundancy payments but a voluntary severance scheme which requires the employee to resign in order to receive the financial inducement.

Bella2010_2

Don't have an answer to the question, but today I was given the helpline number for HMRC, whom may be able to help you with this query as well. Their number is 0845 302 1479

jazzyman01

Sounds very strange to me. Even if they want volunteers it should be clearly indicated as voluntary redundancy, payments would still be tax free up to the max of £30,000 (conditions apply ie if part of it is notice then may have to pay tax on that part).
However, asking people to resign to get the money? Is it in writing that you will get payment if you resign? If not, what is to stop them accepting your resignation but not actually making a payment? It would be difficult to prove verbal promises in a Tribunal.

ceridwen

It sounds very odd to me as well.

If an employee resigns voluntarily from a job then they could be disqualified for up to 6 months from any benefit they are due for - as the DWP would say they had left their job voluntarily.

How on earth could one prove the loss of a job was a redundancy and the payout was a redundancy payout - if the word "redundancy" was never used? - Answer = you couldnt.

I would be very wary that they were trying to play a trick on me.