Tax on notice period

xxxpinkladyxxx

I'm a secretary in a law firm and they are making redundancies. I have volunteered. In the package that they are offering, I will get 7 months pay - 3 of that being my notice period that I won't have to work.

When they calculated what I would get, they put the notice period down as subject to tax. My redundancy package will be less than £30k which I know you can have tax free. People have asked if the notice period will be taxed or not because they haven't made it clear and they have said they can't advise on this question as it will vary from person to person. Why? Surely if the notice period is taxable, then it gets taxed for everyone and if it isn't, then it doesn't.

dampsquib

HMRC tightened their stance on PILONs some years ago. Most of them are taxed as normal income now, so don't benefit from the £30,000 tax free amount on Termination Payments.
In my experience, the only chance of getting the PILON treated as a Termination Payment is if you have no contractual right to the payment, and it is not the custom & practice of your employer to pay PILONs to staff when they make them redundant.

getmore4less

Another way if the redundancy is in the future and the deal is full PILON is to negotiate the notice to be worked from now and the PILON(some or all) to become compensation.