Any Employment experts? PILON query on redundancy

[Piglet]

A friend (yes really.....) is being made redundant. His contract has no PILON clause in it but he is not being allowed to work his notice period.

Having had a bit of a Google, it appears that without a PILON clause, not allowing him to work his notice is a breach of contract and therefore any PILON payment is actually damages and therefore not subject to tax/NI.

It appears that a PILON clause can be implied into his contract but this is redundancy immediately following a TUPE transfer so can there be any implied term in this scenario as there is no "custom and practice" to follow?

Any help gratefully received, it's not my area of law and his employer have given virtually him (and others) virtually no time to deal with this.

[Nigel_O]

I was in an identical position in the middle of 2014 - I have now written to HMRC three! times asking for clarification - all three have been ignored (which I find bemusing, as they have just issued me with an overdue SA payment warning for the princely sum of £2 - seems they can ignore me, but I can't do the same....)

Anyway - do a search for EIM12796 and EIM12978 on the HMRC website - these are the two articles that I'm quoting in my correspondence

On the basis that HMRC have yet to reply, I cannot say whether this is an effective approach, but if I get anywhere, I'll post back

[Piglet]

Thanks Nigel, that's useful, I'll pass it on.

[Jasandjules]

Have you considered a simple approach of asking them to put that this payment is for loss of office?

[allergictocheese]

I took professional advice last year on a similar matter. The advice was that if my contract had a PILON provision, any amount paid up to that PILON would be taxed as normal and anything above tax-free subject to the statutory maximum. In my case I negotiated 3 months salary and was taxed on 1 week of it (which was my PILON contractual entitlement).