Taxation of redundancy payment advice

Cell

Afternoon all

My wife was due to be made redundant in January 2010, but as they needed her specific skill set they have employed her on a ‘same basis’ format (ie her T&Cs remained unaltered), renewed every six months or so. This worked for them as they didn’t need to keep her on the payroll long term, and to allow her to seek permanent work in the interim, in recognition of the fragility of her position.

The explicit terms of this deal were that either they or she could give three months notice and at the end of that she would receive the same package as if she had left in January 2010.

She has now found a job and has exercised her side of the agreement. Her current employers have played ball and she has received her redundancy statement in the sum of £34,000 or so. This will be paid on her last working day (3rd June) and she starts her new job on 6th June.

I appreciate that the £4000 would be taxable (unless put into pension etc), but I am seeking reassurance that the balance will not be taxed. It IS a proper redundancy, and reflects the same as she would have got last year.

It is of course a relatively nice position to be in, but equally for the past 15 months or so we’ve had a lot of uncertainty, and even now there is the risk that things may not work out in her new job.

Any responses would be appreciated J

getmore4less

AIUI she need to have a letter of termination that says redundancy to confirm that it is a termination by reason of redundancy

The asking to finish would come under counter notice so she has still beed dismissed and not resigned.

Genuine redudancy payment first £30k tax free.

Cell

Thanks for that.

It is a genuine redundancy (all be it long drawn out), but I can't recall seeing an official letter. They have, however, already prepared a formal statement entitled 'severance package'.