Redundancy pay & compromise agreement

Uncle_Cuddles

The company I work for is closing their UK office and I am to be made redundant. My fellow employees have already been made redundant and finished with their 12 weeks pay in lieu of notice. As the most senior employee, I have been asked to work my notice (3 months). They are giving me a generous redundancy package (5 months pay), and have asked me to sign a compromise agreement today which has in it my redundancy package, which they call an ex-gratia payment. I am going to pass it to solicitors for their advice but one thing that I am unsure about is the taxability of the redundancy payment. If I search the net I see that if it is below £30K then it is not usually taxable, but then I noticed if it is contractual then it is taxable. My concern is that if I sign the compromise agreement, does the ex-gratia payment become a contractual payment and therefore taxable?

Thanks in advance for any advice!

Bossyboots

No, it refers to your employment contract when it says contractual. My OH's cousin for example is guaranteed 12 months salary if he is ever made redundant. Therefore his payment would be taxed (it would be over 30k anyway but it was the example I could think of) as it would be a contractual payment.

Uncle_Cuddles

Thanks for the speedy reply! That is reassuring. I think I would be about £7.5K worse off if it was taxed.