BT Leaver and Redundancy payments

tigerspill

camelopardis wrote: »

Just out of interest, can anyone post what the current BT leaver package is (number of weeks etc)

Unfortunately "It Depends".
There is a difference between "Leaver" schemes like have been run before and the new "Early Voluntary Redundancy" or EVR.

The EVR terms are a month's pay for each of your first four years of service + two weeks pay for each remaining year + your notice period.
I believe only a few have been offered this as yet. Capped ate two years pay. I believe there are different tax implications for this compared with a Leavers scheme

However, others have been offered a "Leavers" package. These can be anything depending on where you are. But they seem to be close or the same as the EVR.

EscapeArtist

Really useful info in this thread...

Can anyone confirm whether the employer payments into the pension scheme are paid on the leaver payment?
I don't see that explained in the FAQs.

tigerspill

EscapeArtist wrote: »

Really useful info in this thread...

Can anyone confirm whether the employer payments into the pension scheme are paid on the leaver payment?
I don't see that explained in the FAQs.

They dont match anything you put in from the leavers scheme.

robin61

EscapeArtist wrote: »

Really useful info in this thread...

Can anyone confirm whether the employer payments into the pension scheme are paid on the leaver payment?
I don't see that explained in the FAQs.

You can choose to pay some of your early leaver payment into the BTRSS it's referred to as the increase your fund (IYF) option. If you choose to do that then that money is considered to be an employer contribution into your pension scheme in the same way as the pension contributions under smart pensions work.

But as Tigerspill says BT don't match this in any way.

EscapeArtist

Thanks for the replies.

Say I get 12% employer payment into BTRSS.. .presumably that will continue to be paid at least on the PILON if I get ELP?

tigerspill

robin61 wrote: »

You can choose to pay some of your early leaver payment into the BTRSS it's referred to as the increase your fund (IYF) option. If you choose to do that then that money is considered to be an employer contribution into your pension scheme in the same way as the pension contributions under smart pensions work.

But as Tigerspill says BT don't match this in any way.

And looking at the tax calculator spreadsheet they actually take the pension IYF out of the 30K that is tax free anyway. Shocking.
So if I get it I plan to dump what remains of my 40K into the SAC the month before I leave as a lump sum. This will offset at least some of the PILON tax.

kaleel86

Another confused employee.....

This PILON thing is a little complicated for me. Could someone calrify? If my paid leaver package is between 10 and 25k (intentionally vague) and my contracted notice period is 1 month... Could I expect to get the lump sum completely tax free?

tigerspill

kaleel86 wrote: »

Another confused employee.....

This PILON thing is a little complicated for me. Could someone calrify? If my paid leaver package is between 10 and 25k (intentionally vague) and my contracted notice period is 1 month... Could I expect to get the lump sum completely tax free?

Did you get the tax calculator in the leavers email? It is a spreadsheet where you enter your details.
But with a one month notice period and that this starts the day you apply (not the day you leave) - will ou not be working your notice anyway rather than being paid in lieu?

robin61

kaleel86 wrote: »

Another confused employee.....

This PILON thing is a little complicated for me. Could someone calrify? If my paid leaver package is between 10 and 25k (intentionally vague) and my contracted notice period is 1 month... Could I expect to get the lump sum completely tax free?

I think a lot of people have found it confusing. If a PILON applies to you you will be given access to a ready reckoner which once you've entered the details personal to you will tell you how much of your early leaver payment is subject to PILON. Basically it starts working the PILON out from the day you apply for the early leaver payment so the earlier you apply and the further away your leaving date the lower the PILON as you will in effect have worked some or maybe all of your notice period.

Be careful here. If I was you I would check with HR what your notice period is because it's not what notice you needed to give BT its what they would need to give you and that's not always the same.

However if someone has a leaver payment of £30k or under and there is a PILON then it unfortunately means that there is tax and NI to pay.

Example - £30k leaver payment and deemed PILON of £5k.
You would get £25 K tax free but £5K would be subject to tax at your marginal rate and NI. You would have to pay the tax in the current tax year.

Example - Early lever payment of £100k and PILON of £20k
£30k - tax free
£20K - subject to tax and NI and payable in current tax year
£50K - subject to tax only.

kaleel86

tigerspill wrote: »

Did you get the tax calculator in the leavers email? It is a spreadsheet where you enter your details.
But with a one month notice period and that this starts the day you apply (not the day you leave) - will ou not be working your notice anyway rather than being paid in lieu?

Thabks for your reply tigerspil

I did get the tax calculator but some of the terminology used in it escapes me. I didn't quite get what PILON was and who it was applicable too. The calculator said I took everything the 'estimate' gave me tax free. But I wasn't sure if that was right. What you've said above agrees with what I would have thought, but figured I should do my own research just in case.