Ex Gratia Payment (Resignation)

leedom

Hi, I have worked at my current job for over 6 years and have now been asked to consider a settlement agreement. However, as they would have to pay my contractual notice as I have a PILON statement in my contract, they have asked if I would consider resigning so they can still pay me an ex gratia payment which would not be subject to tax/NI? Not sure this sounds legal....any help appreciated! Thanks

engineer_amy

have a read at this and the link within it titled ex gratia payments
http://www.hmrc.gov.uk/manuals/nimmanual/nim02510.htm
seems it can be difficult to determine whether payments truly are "ex gratia" and therefore not subject to NICs


they may be trying to save the employers NIC by paying it this way, rather than the full notice pay

TrickyDicky101

Why are they trying to get rid of you? If you have done nothing wrong, then surely it would be in your interests to await redundancy?