Redundancy Notice, PILON and Tax
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minky66
Posts: 2 Newbie
I've hunted high and low for advice on this situation and can't find anything that really answers my question, so I'm hoping someone here can give me some advice.
A group of us were notified in mid Jan that our ‘roles is proposed to be one of those at risk of redundancy’. They want to reduce the group by 2 people and we have to go through a consultation period and selection process, which is on going and due to complete mid feb.
In the notification letter was breakdown of the redundancy pay out with included PILON of 12 weeks (notice as my contract states but it says nothing about PILON) tax free.
The letter they sent said nothing about being given notice on our positions but the redundant roles would terminate as if the end of March. Effectively they have served notice on all our position before consultation has even started or the selections have been made. My understanding it that notice on position shouldn’t be given until the consultation period is complete and the selections have been made.
On questioning this, they have stated that this is the only way we can avoid paying tax/NI on the PILON.
I’m totally confused, I’ve appear to have been given notice on my position through potential redundancy that isn’t yet confirmed and they propose to pay me tax fee PILON but still expect me to work my ‘notice’ till the end of March!! What do I do?
Confused Bunny!
A group of us were notified in mid Jan that our ‘roles is proposed to be one of those at risk of redundancy’. They want to reduce the group by 2 people and we have to go through a consultation period and selection process, which is on going and due to complete mid feb.
In the notification letter was breakdown of the redundancy pay out with included PILON of 12 weeks (notice as my contract states but it says nothing about PILON) tax free.
The letter they sent said nothing about being given notice on our positions but the redundant roles would terminate as if the end of March. Effectively they have served notice on all our position before consultation has even started or the selections have been made. My understanding it that notice on position shouldn’t be given until the consultation period is complete and the selections have been made.
On questioning this, they have stated that this is the only way we can avoid paying tax/NI on the PILON.
I’m totally confused, I’ve appear to have been given notice on my position through potential redundancy that isn’t yet confirmed and they propose to pay me tax fee PILON but still expect me to work my ‘notice’ till the end of March!! What do I do?
Confused Bunny!
0
Comments
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Sounds like they have given you an 'at risk of redundancy letter'. The letter you've got has some information in it about what you would get if your post came to an end. At the end of consultation if your post is made redundant then you will get given your termination of employment letter. It looks like they do not want anyone to work their notice and are paying you in lieu of it. This can work in your favour as they can pay it gross (weekly pay before tax/NI) and combine it with your redundancy money and if it is under £30K it is tax free. Hope this helps0
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How can they give me PILON when I'm being asked to work it till the end of March! Surley, pay in lieu of notice means they are paying you but don't expect you to work it?0
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In the notification letter was breakdown of the redundancy pay out with included PILON of 12 weeks (notice as my contract states but it says nothing about PILON) tax free.
It is because there is no mention of PILON in your written contract that it can be tax free. If it had been stated as an option in your written particulars then PILON would be contractual and therefore subject to tax.0 -
How can they give me PILON when I'm being asked to work it till the end of March! Surley, pay in lieu of notice means they are paying you but don't expect you to work it?
They should pay you for the time you work - and if that includes time after they have formally given you notice (and it doesn't seem as though that has happened yet - you have simply been told that it may happen) then that would reduce the amount of tax-free PILON you would be entitled to.
If they really did try to pay you tax-free while you were working during notice then they would appear to be trying to avoid paying NI.0
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