redundancy & arbitration waiver- tax free reduncancy money

smmz1972

I'm being made redundant (which is good news!) and I am in line to receive my redundancy package in addition to 3 months worth of pay for my notice period.

I understand that the redundancy package is tax free but I was told today that if I were to waive my right to arbitration then the local tax office can award all of the money I get for my redundancy tax free, or at least I can claim back any tax I pay on it.

Any ideas if this is true. I've heard it depends on your local tax office and that this isn't a general tax rule.

Look forward to any response and no you can't have a sub.... ;-)

Conor_3

First I've heard of redundancy being tax free.

cazziebo

smmz1972 wrote: »

I'm being made redundant (which is good news!) and I am in line to receive my redundancy package in addition to 3 months worth of pay for my notice period.

I understand that the redundancy package is tax free but I was told today that if I were to waive my right to arbitration then the local tax office can award all of the money I get for my redundancy tax free, or at least I can claim back any tax I pay on it.

Any ideas if this is true. I've heard it depends on your local tax office and that this isn't a general tax rule.

Look forward to any response and no you can't have a sub.... ;-)

I don't quite understand this - comp and bens not my area at all - but there does seem to be a loophole. I was made redundant a couple of years ago and was advised that if I signed a compromise agreement, then all the redundancy pay would be tax free. Pay in lieu of notice was taxed. I don't know where the law/rules are but my redundancy was tax free. (And very welcome)

Louise1521

I believe with redundancy that the first 30k is tax free, anything over that and you're taxed.

rjm2k1

smmz1972 wrote: »

I'm being made redundant (which is good news!) and I am in line to receive my redundancy package in addition to 3 months worth of pay for my notice period.

I understand that the redundancy package is tax free but I was told today that if I were to waive my right to arbitration then the local tax office can award all of the money I get for my redundancy tax free, or at least I can claim back any tax I pay on it.

Any ideas if this is true. I've heard it depends on your local tax office and that this isn't a general tax rule.

Look forward to any response and no you can't have a sub.... ;-)

Why not ask your local tax office? You can do it without identifying yourself.
IIRC, the redundancy money itself is taxfree upto 30k, the pay in lieu of notice probably isn't tax free. Perhaps they are talking about somehow combining the lieu pay with the redundancy, if you sign to say you won't then go after them for the lieu pay you haven't had because it looks like it was redundancy money?!