Should PILON still be taxable?

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?


  • nick74
    nick74 Posts: 829
    Name Dropper First Post First Anniversary
    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
    Name Dropper First Anniversary First Post I've helped Parliament
    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
    Name Dropper First Anniversary First Post
    PILON is already a gift - you're getting paid for the time you would have worked, but you don't have to work it.
Meet your Ambassadors


  • All Categories
  • 341.7K Banking & Borrowing
  • 249.7K Reduce Debt & Boost Income
  • 449.1K Spending & Discounts
  • 233.9K Work, Benefits & Business
  • 606K Mortgages, Homes & Bills
  • 172.5K Life & Family
  • 246.8K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.8K Discuss & Feedback
  • 15.1K Coronavirus Support Boards