Any employment lawyers on here?

[FurtiveFreddy]

Need some advice for my partner who is just about to be made redundant.

Happy to pay for the consultation and it probably only needs to be done over the phone unless things start to get litigious.

Anyone professionals here who want to offer their services?

[FurtiveFreddy]

Mainly how much money she should receive and how it will be taxed.

I know what the statutory redundancy payment would be but there are some grey areas when it comes to PILON I want to discuss.

[FurtiveFreddy]

Jasandjules said:

If you want to email me your question and the PILON clause I will have a quick look FOC.

Ok thanks, it will probably be tomorrow.

[FurtiveFreddy]

edc said:

Only the company can tell you how much redundancy pay you will receive. PILON is generally taxable though.

My limited knowledge and research seems to suggest this is correct where there is a PILON clause in the contract.

But if there is no clause and a 'loss of office' compensation payment is made (and a compromise agreement is entered into) then that payment can be included in the £30k tax free allowance.

If that is the case and the gross amount was the same in both situations, would that not benefit both parties, as neither would have to pay the relevant taxes and the employer wouldn't have to pay NI?

In other words, if the statutory redundancy pay + PILON (before tax) came to £30k, wouldn't it be better for everyone for a compromise agreement to be made which paid £30k (tax free) loss of office' compensation?

[FurtiveFreddy]

I'm not sure either party want to fudge anything when HMRC might be involved. She'd entitled to 12 weeks notice. We all know they won't make her work that, so it's about trying to get her the biggest payoff with the least tax implications.

It seems that if they payed her 12 weeks money and called it PILON, tax would need to be deducted but if they call it loss of office in a compromise agreement, it would be tax free up to £30k. Have I got that right?

One interesting aside is that one of her colleagues was recently made redundant. He reportedly received around £30k, didn't sign any compromise agreement and the company referred to that payment as "a redundancy payment of 6 month's salary which will be tax free".

If they made the same offer to my partner, could the HMRC claim that is PILON and chase her for tax?