Redundancy and PILON 8 July 2020 at 7:54PM in Redundancy & redundancy planning 9 replies 196 views

3card

Hi all
Last week i was made redundant. When i was given my figures they were based on the statutory redundancy payment and during the meeting i was able to negotiate the redundancy to be made up to my actual earnings 
At 1st they said they couldnt do it because the maximum redundancy they can pay is the £580 per week statutory
When i was later given my settlement agreement they had put the difference of teh statutory figure and the negotiated figure into my PILON figure which obviously means I would now pay additional tax and NI

My question really is, can companies pay more than the maximum statutory redundancy figure of £580 per week legally? If not why is the maximum redundancy figure of £30K tax free?

daveyjp

Any amount of redundancy over the statutory maximum figure can be negotiated between the parties.

3card

daveyjp said:

Any amount of redundancy over the statutory maximum figure can be negotiated between the parties.

And is there anything stopping the additional figure being added to the redundancy figure? (i.e. Tax free)

Masomnia

This all sounds confused.

The weekly cap for SRP is £538.

If you're given PILON then this will be taxable, but that is not your redundancy pay. Redundancy pay is tax-free up to £30k, inclusive of anything they give you above and beyond PILON.

daveyjp

Are you working your full notice?  If you are no PILON payment is due as you are receiving your salary.  The extra negotiated should therefore be redundancy payment.

If they have let you go early and are paying you to the end of notice that is a PILON payment and is a salary payment.

3card

Masomnia said:

This all sounds confused.

The weekly cap for SRP is £538.

If you're given PILON then this will be taxable, but that is not your redundancy pay. Redundancy pay is tax-free up to £30k, inclusive of anything they give you above and beyond PILON.

Sorry my mistake. Where i referred to the statutory redundancy i meant £538 and not £580.
I was had 2 figures in the meeting which were the statutory redundancy payment which would be tax free and my PILON payment which i know is subject to tax and NI
The additional payment i negotiated was the difference between the statutory redundancy and what the redundancy figure would be based on my actual earnings. 
They told me that this extra payment would have to be added to my PILON payment even though in my eyes it was an additional redundancy payment

Sorry for any confusion

3card

daveyjp said:

Are you working your full notice?  If you are no PILON payment is due as you are receiving your salary.  The extra negotiated should therefore be redundancy payment.

If they have let you go early and are paying you to the end of notice that is a PILON payment and is a salary payment.

Hi again 
I wasnt required to work any of my notice
My meeting was on 29th June and i was to be made redundant on the 30th June
I was paid my figures on 1st July 

HTH

Masomnia

If they give you extra above and beyond PILON that shouldn't need to be taxed, unless there's something I'm missing.

daveyjp

Sounds like managers finding a way to pay more without breaking the company policy of not paying more than the statutory maximum redundancy payment.

3card

Masomnia said:

If they give you extra above and beyond PILON that shouldn't need to be taxed, unless there's something I'm missing.

daveyjp said:

Sounds like managers finding a way to pay more without breaking the company policy of not paying more than the statutory maximum redundancy payment.

Sorry for the late reply
So there is nothing legally to have stopped them putting the increased redundancy into my redundancy figure? I have a feeling they are going to argue otherwise