Redundancy payment

davecon1

Afternoon all

I am due to be made redundant at the end of April though officially we have not been told this. Over the next week or two consultations will begin.

Thanks to the various sites and calculators I know exactly what my statutory redundancy will be (20 years at the company) but the owners have said that they are going to be 'generous' with certain key members of staff. This is to reward them for their past hard work and to ensure that we continue to work right up to the last day.

They will not answer any questions on the amount and have said that they will only let us know how much extra we are entitled to 10 days before being made redundant. Apparently this is the advice from their solicitor as apparently if we are told in advance it could be deemed contractual and we would be taxed. I have read that we can receive up to £30k tax free.

It's not a pleasant thought but I believe they are using a carrot and stick approach and will renege on paying an extra money or at least vastly reduce it. Is there anything I can do to try and pin them down to an amount as the pay off amount could significantly affect our future.

Hopefully someone knows chapter and verse on this.

getmore4less

read up about counter notice

with 12weeks getting another job and stat may be better than an unknown.

davecon1

very true. I went for an interview the other week but said that I was committed to the end of April.

Will look up counter notice!

noelphobic

davecon1 wrote: »

Afternoon all
They will not answer any questions on the amount and have said that they will only let us know how much extra we are entitled to 10 days before being made redundant. Apparently this is the advice from their solicitor as apparently if we are told in advance it could be deemed contractual and we would be taxed. I have read that we can receive up to £30k tax free..

This sounds very odd! I took voluntary redundancy at the end of June and knew months in advance what my payment would be. It didn't make any difference to the tax position and I don't understand why it would.

getmore4less

the tax position changes if you have to work your notice.

noelphobic

getmore4less wrote: »

the tax position changes if you have to work your notice.

I did work my notice.

anamenottaken

davecon1 wrote: »

Afternoon all

I am due to be made redundant at the end of April though officially we have not been told this. Over the next week or two consultations will begin.

Thanks to the various sites and calculators I know exactly what my statutory redundancy will be (20 years at the company) but the owners have said that they are going to be 'generous' with certain key members of staff. This is to reward them for their past hard work and to ensure that we continue to work right up to the last day.

They will not answer any questions on the amount and have said that they will only let us know how much extra we are entitled to 10 days before being made redundant. Apparently this is the advice from their solicitor as apparently if we are told in advance it could be deemed contractual and we would be taxed. I have read that we can receive up to £30k tax free.

It's not a pleasant thought but I believe they are using a carrot and stick approach and will renege on paying an extra money or at least vastly reduce it. Is there anything I can do to try and pin them down to an amount as the pay off amount could significantly affect our future.

Hopefully someone knows chapter and verse on this.

Have they said you are one of the "key members of staff"?

Telling you that there will be an enhanced payout and explaining how it would be calculated could be contractual but the first £30K would still be tax-free. Do they appear to be in a financially good enough position that they could pay out significant sums of money to how ever many people this would involve?

With your 20 years of experience with this organisation, have you ever known them have redundancies before? If they have, did they treat the people well and honour promises? If they have and did regularly pay enhanced sums then it may be that this could already be considered as contractually "custom and practice".

Is the solicitor "in house" or from a firm?

getmore4less

noelphobic wrote: »

I did work my notice.

If the payment is dependant on working the notice it can becomes taxable.

Andy_L

Redundancy payments beyond 30k are always taxable. It is payment in lieu of notice (PILON) that may or nay not be taxable depending on contract/custom & practice