PILON and starting new job

mummy_2_be

I was made redundant last Friday and last day was today. i had only been with the company since January , so didn't recieve a redundancy payout but I will be getting Pilon 30 days which the company say will be put though tax free. I have secured a new role and start Monday I would like to know will I be charged emergency tax in new job as I am effectively employed twice , also as the pilon is tax free will that count as income when giving tax credits an estimate of income
many thanks

prowla

PILON is not tax free; it is salary.

anamenottaken

prowla wrote: »

PILON is not tax free; it is salary.

It can be paid free of tax if it is not a contractual entitlement.

It's not salary: it is compensation for not receiving proper notice and thus not receiving salary for that period.

anamenottaken

mummy_2_be wrote: »

I was made redundant last Friday and last day was today. i had only been with the company since January , so didn't recieve a redundancy payout but I will be getting Pilon 30 days which the company say will be put though tax free. I have secured a new role and start Monday I would like to know will I be charged emergency tax in new job as I am effectively employed twice , also as the pilon is tax free will that count as income when giving tax credits an estimate of income
many thanks

If you hand in a P45, the new employer will operate its payroll using the tax code reported on it.

If you don't have a P45 to hand in in time for the first pay run, any over-payment of tax will be sorted out once they have got your P45.

mummy_2_be

thank you for your help

McKneff

And don't worry, if you don't have a p45, ask your new company for a p46.


If you think you are overpaying tax, it will eventually even itself out through the payroll.


Well done on getting a job so quickly and good luck with it. x


Annie

prowla

anamenottaken wrote: »

It can be paid free of tax if it is not a contractual entitlement.

It's not salary: it is compensation for not receiving proper notice and thus not receiving salary for that period.

So are you saying that the employer can make a PILON payment which exceeds the employee's notice period?

Mooglet71

prowla wrote: »

So are you saying that the employer can make a PILON payment which exceeds the employee's notice period?

Yes they can. It is at the discretion of the employer if there is nothing contractual.