yet another redundancy query - tax this time

[shirt]

i'm considering volutary redundancy if the figures stack up. i know that the redundancy pay is tax free but i'd also get the option of being paid my 3mth notice period without having to work it. would this and any outstanding holiday pay also be tax free if lumped in as a single severance payment? it would make quite a difference.

cheers,
shirt.

[OneDs]

No, first £30k of redundancy is tax free everything you have stated is pay in lieu of notice and considered normal salary.

[shirt]

i take it NI, pension etc. would also have to be paid on the notice?

[OneDs]

NI yes, pension depends on what arrangements you have, if you are contractually obligied then yes up to your exit date, however some employee contributions to a certain degree are voluntary so you could stop paying any voluntary contributions.

Edited by OneDs on Wednesday 2nd September 15:22

[shirt]

cheers. hmmm, tougher decision now.... i am a cheap scalp at least should i decide to go!

[Soovy]

shirt said:

i'm considering volutary redundancy if the figures stack up. i know that the redundancy pay is tax free but i'd also get the option of being paid my 3mth notice period without having to work it. would this and any outstanding holiday pay also be tax free if lumped in as a single severance payment? it would make quite a difference.

cheers,
shirt.

No.

Notice period and holiday is subject to tax and NI.

Your severance money is tax free up to 30k.

[Tony*T3]

PiLoN is not tax free, as said above.

If you get three months PiLoN, you're looking at 2 months gross pay roughly.

EDS/HP?

[shirt]

what is EDS/HP?

[shirt]

that'd be a no then!

subsidiary of a certain indian conglomerate.