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Redundancy Help Please

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I am being made redundant after 10 years. If I opt for a Compromise Agreement, is this liable to Tax and NI?

Many thank's
Don't waste your words I don't need,
Anything from you.
I don't care where you've been or,
What you plan to do.

Comments

  • simonleblank
    simonleblank Posts: 369 Forumite
    I thought that I was confused, now I know that I am confused? Could anybody please help in simple terms?

    Thanks x
    Don't waste your words I don't need,
    Anything from you.
    I don't care where you've been or,
    What you plan to do.
  • Debt_Free_Chick
    Debt_Free_Chick Posts: 13,276 Forumite
    10,000 Posts Combo Breaker
    In general terms, the first £30k is paid free of tax and NI. The balance is subject to income tax, but not NI.

    However, if part of the settlement is pay in lieu of notice (PILON), then that might be paid as "pay" and subject to the usual income tax and NI. It's as if you had been paid normally, in advance, without the need to then turn up for work.

    It should all be set out in the agreement. No harm in seeing a draft and then taking legal advice about it. You are not bound by it until the final agreement is signed, anyway.
    Warning ..... I'm a peri-menopausal axe-wielding maniac ;)
  • Fizzi
    Fizzi Posts: 6 Forumite
    Just to add to this, can anyone advise on how a company car might be treated in a compromise agreement situation?

    I am considering buying my company car on being made redundant. The company has had a market valuation carried out and have given me a price. If I agree this and ask them to deduct the value from my compromise agreement settlement amount, thereby reducing the amount I receive in excess of 30k, will I still be liable to pay tax on the gross amount over 30k , i.e. as if I hadn't bought the car OR will I only be liable to pay tax on the net amount over 30k ?
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