Voluntary Redundancy and PAYE

Woodster211060

Hi

I am currently in the middle of possible redundancy process and wonder whether if I enter in to negotiations with my employer I can negotiate away my PILON rights (3 months) and get them to pay this as a lump sum to avoid PAYE implications. I have 6 years service and 3 months notice period. For compulsory redundancy I qualify fro £10600 PILON and £3600 as stat redundnacy pay. I am trying to maximise the joint sum by minimising taxable income. Is it possible and is it legal?

Ta

Woodster

PaulLuke

I thought that was exactly what PILON was used for i.e. Payment In Lieu Of Notice and that this means for tax purposes it is viewed as a compensatory payment and hence not taxable. At least that was the case with some redundancies that were carried out by my employer several years ago!

Woodster211060

It seems that PILON is just that "Payment in lieu" and therefore is now taxable. I am wondering if I negotiate voluntary redundancy whether i can transfer PILON some into a lump sum to enable it to be tax free.