capability dismissal

startofmynewlife

I have just been dismissed on capability grounds after being off sick for 13 months. I work /worked for the local council.

I have been given 3 months pay in liue of notice. Does anyone know if this is taxable. My HR are saying it is but I am not so sure.

tippytop

Hi, I am no expert but the exact same thing happened to me. The company told me that the 3 months in lieu had to be taxed but i wrote to the tax office with a copy of my contract, filled in a P50 and got my tax back. Just a warning you need to fill in the P50 before you claim JSA if that's what you plan to do or you will have to wait until the end of the tax year.

HTH and good luck

mariefab

I don't know about the tax issue, but did they also pay you for your accrued but untaken statutory holidays?

Weirdlittleman

It will be taxed yes as its basically being paid for notice to not show up. You may be entitled to a rebate though if you end up paying too much tax for the year.

Uncertain

startofmynewlife wrote: »

I have just been dismissed on capability grounds after being off sick for 13 months. I work /worked for the local council.

I have been given 3 months pay in liue of notice. Does anyone know if this is taxable. My HR are saying it is but I am not so sure.

I'm afraid your HR are correct assuming your contract entitled you to three months notice.

However, if you were only entitled to say one month's notice, and they paid you three as a gesture of goodwill under the circumstances, then there is an argument that the other two months are compensation and therefore tax free.

Double check your contract just in case.