Should PILON still be taxable?

Hi MSE,
Prior to April 2018, my understanding was that PILON was not taxable but is now. Due to the current tough times, should the government revert back to this law with so many redundancies on the horizon?
Thanks,
MN89
 

Comments

  • nick74
    nick74 Posts: 829
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    In practical terms, PILON usually was taxable just as it is now. My understanding is that prior to 2018 in certain situations, such as if there was no PILON clause in the employment contract, then PILON could be treated as compensation and therefore not taxable up to £30k, in a similar way to redundancy pay. However I suspect that most employment contracts do include a PILON clause, so it would always have been taxable under the old rules anyway. 
  • getmore4less
    getmore4less Posts: 46,882
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    Don't for get PILON is to put you the position  you would have been if you worked.

    Even when not taxable the employer could pay out NET pay rather than GROSS   keeping  the tax and NI for themselves.
  • prowla
    prowla Posts: 13,095
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    PILON is already a gift - you're getting paid for the time you would have worked, but you don't have to work it.
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