TUPE'D with a gift

Sortingoutthebooks

Hi not sure if this belongs in the benefits or the redundancy section so admin please move if I got it wrong.

In march the company I work for will cease trading with the majority of staff being made redundant. I however will be TUPE'D to a new company while retaining my employee rights etc therefore not receiving a redundancy payment. However my employer will be gifting me around £3.5k as a thank you. While I am of the understanding that this will be tax free as it is considered a gift does anybody know if it will affect my universal credit ? We currently receive around £1500 a month in Universal credit and taking the taper into account that £3.5k will become around £1.5k if so. 

Thanks for the help 

getmore4less

Are you sure that can be given tax free as it is connected directly to employment might count as a bonus/earnings.

That would roll over to UC.

Sortingoutthebooks

getmore4less said:

Are you sure that can be given tax free as it is connected directly to employment might count as a bonus/earnings.

That would roll over to UC.

its part of what i wanted to try and get confirmed. my boss has assured me that yes it can however i only have his word on that 

getmore4less

How will it get paid?

Sortingoutthebooks

getmore4less said:

How will it get paid?

what ive been told is that it will be paid into my account as part of my wages in my final pay check however while it will be documented speratley on my pay slip and no tax will be taken off of it. i have been told to make sure keep hold of my final pay slip p45 and p60 as it may get queried by hmrc but these things will clarify that it was a a tax free gift from who will by then be my former employer. 

Thrugelmir

However it's dressed up it's form of remuneration not a gift. 

Grumpy_chap

Sortingoutthebooks said:

Hi not sure if this belongs in the benefits or the redundancy section so admin please move if I got it wrong.

In march the company I work for will cease trading with the majority of staff being made redundant. I however will be TUPE'D to a new company while retaining my employee rights etc therefore not receiving a redundancy payment. However my employer will be gifting me around £3.5k as a thank you. While I am of the understanding that this will be tax free as it is considered a gift does anybody know if it will affect my universal credit ? We currently receive around £1500 a month in Universal credit and taking the taper into account that £3.5k will become around £1.5k if so. 

Thanks for the help 

Employer's can't simply give staff a "gift" of £3.5k and that "gift" be exempt from tax.  If there was such a scheme, then every employer would be doing this all over the place.

The employer may be thinking of "trivial benefits", but this amount is well outside that threshold plus simple "cash" is excluded from the "trivial benefits" eligibility.

If your total income (including the gift) is less than your personal allowance, then it will not incur tax but that is related to the individual's personal circumstances rather than because the "gift" itself was automatically tax free.

Andy_L

Under the duck test it looks, walks & quacks like a bonus so should be taxed like a bonus

Sortingoutthebooks

thanks for the advice all i phoned HMRC and they have confirmed that my employer can give me this tax free as i am moving to a new company this will be classed as a golden handshake and providing its under £30k it will not be taxed 

Grumpy_chap

Sortingoutthebooks said:

thanks for the advice all i phoned HMRC and they have confirmed that my employer can give me this tax free as i am moving to a new company this will be classed as a golden handshake and providing its under £30k it will not be taxed 

That means it must be being treated as redundancy payment in which case your contract of employment with the current business will cease at a certain date and you would then start as a new employee with no continuity of service with the new employer and a completely new contract of employment.

Is the new business that is taking over definitely offering you the new contract to start from immediately where the old job left off?  Will the new employer's decision in that regard be impacted (either way) if the redundancy event has occurred?

What is certain is that, if you are made redundant, the you will not be within any of the protections that apply in a TUPE situation.

Is the £3.5k the correct (or higher than the correct minimum) payment for the redundancy situation?  How are all the other elements of a redundancy situation being managed?  Notice period.  Outstanding annual leave. Etc.

The OP may find this link worth reading through:
https://app.croneri.co.uk/topics/final-payments-and-related-matters/indepth?product=132

chrisbur

All I get is
"This content requires a Croner-i subscription."