Redundancy payment questions

[sleep envy]

Mrs Envy had her second interview today and she asked the money question - if she were to be made redundant what would her final salary payment be?

she was told;

- 6 weeks notice, taxed at the normal rate
- 1 week holiday in lieu, taxed at the normal rate
- loss of benefit, taxed at the normal rate
- 6 weeks pay (1 week for every year of service) capped at £330/week, taxed at the normal rate

having heard the above, quite frankly, I think their accountant needs tinning rather than the mrs, AFAIK the above would be all tax free?

does anyone have any conclusive evidence that I can send her into work with?

cheers

[rolex]

You only pay tax on redundancy payments over £30000
This may help
http://www.hmrc.gov.uk/guidance/redundancy-factshe...

[Dai Capp]

notice pay is only taxable if worked otherwise it is PILON (pay in lieu of notice), only exception would be if she has a PILON clause in her contract but this is unusual. Stat redundancy isn't taxable but holiday pay is. The ex gratia payment may or may not be depending on how they class it so that's a bit vague.

If the whole deal comes to more than £30K then the amount over is taxable.

If they're going to make folk redundant you'd think they'd check these things wouldn't you...

DC

[Tuscan Tart]

The 6 weeks notice (Unless it is not provided for in her contract, and is a payment in lieu of notice.) and the holiday pay is taxable.

The 6 weeks redundancy pay is not taxable, (1 week for each years service, I take it she is younger than 41, otherwise it is 1.5 weeks for each year of service after 41.)

Don't know about the loss of benefit.

[muley]

When my chiselling employers let me go, the loss of benefit referred to a car allowance that I was being paid and was always taxed in the normal way.

By the way, this was one of the better events in my life (but that wasn't immediately clear to me at the time!)

[spikeyhead]

muley said:

By the way, this was one of the better events in my life (but that wasn't immediately clear to me at the time!)

Having been made redundant twice and jumped from another place just before they went under, I can only say that it always resulted in something better coming along.

Sleep Envy, hope it works out well for your OH