Am I being screwed over on TAX, NI & Student Loan?

mozeruk

Hi All,

First of all apologies to anyone out there who has been made redundant, I recently suffered it for the first time and after leading a successful team it was a shock and hard time. The only advice I can give it just man up, as soon as you find out focus all your efforts on yourself and bettering yourself, dont let it get you down.. and bo110cks to your employers, its their loss!

I have recently received my final pay packet after 60 days notice and was shocked at the amount of tax, NI & Student Loan on there.

My monthly "earnings" on my payslip is divided into the following;
Basic Salary
Ex Gratia (T)
PILON (T) Monthly
Statutory Notice

The last 3 are part of my redundancy package, I am not sure if the (T) means Tax, but it looks that way.

So the question is, should I be paying tax, NI and Student Loan on these payments? (They are well below the 30k freshhold as I understood it anything less than 30k is not taxable)

Happy to provide a copy of my payslip or exact amounts if required, but basically my earnings for the month are 6.8k and deductions are 1.8k!! 1.8k is hell of alot more than my usual tax on 1.4k pay!

Any pointers greatly appreciated.

Thanks guys

nimbo

both the pay, and PILON are monthly salary so should have been taxed, and should have had NI and student loan taken from them.

I don't know about the other aspects of the package.

When it comes to April though, you may be able to get some back in the form of an HMRC rebate.

p00hsticks

nimbo wrote: »

both the pay, and PILON are monthly salary so should have been taxed

Actually, I think the positon on taxation of PILON is slightly more complicated, and depends on whether its use is part of your employment contract (in which case it is taxed) or an exceptional case.

What I don't understand is why the OP appears to be getting a payment for both "PILON (Payment in Lieu of Notice)" and "Statutory Notice" ?

marybelle01

p00hsticks wrote: »

Actually, I think the positon on taxation of PILON is slightly more complicated, and depends on whether its use is part of your employment contract (in which case it is taxed) or an exceptional case.

What I don't understand is why the OP appears to be getting a payment for both "PILON (Payment in Lieu of Notice)" and "Statutory Notice" ?

It's more complicated that that even. PILON is taxed if it is contractual OR if it is common practice for the employer to pay it, and in these cases MUST be taxed. If not, the employer can choose to tax it or not - many now do to ensure they don't fall foul of HMRC who like scrutinising these payments. Only non-contractual PILON (if the employer chooses to pay it untaxed) and redundancy pay itself aren't taxable - anything else is.


Petrhaps contractual notice is longer than statutory notice?

martinsurrey

marybelle01 wrote: »

Only non-contractual PILON (if the employer chooses to pay it untaxed) and redundancy pay itself aren't taxable - anything else is

if its not contractural its not PILON, its an ex gratia payment.

terminology is important, PILONS are 100% taxable 100% of the time. Ex gratia payments are a more gray area.

marybelle01

martinsurrey wrote: »

if its not contractural its not PILON, its an ex gratia payment.

terminology is important, PILONS are 100% taxable 100% of the time. Ex gratia payments are a more gray area.

Terminology IS important. You are wrong. PILON is NOT 100% taxable 100% of the time. At least that is what HMRC think (http://www.hmrc.gov.uk/manuals/eimanual/eim12975.htm) and THEY SHOULD KNOW!

The information I gave previously is 110% correct. There are circumstances where it MUST be taxed; and others where it MAY be taxed and the decision is in the hands of the employer.