Voluntary Severance Package General Chat

[Micro Dave]

Apologies for sounding thick but I'm struggling to find the correct advice via our old mate Google.

If you're offered 2.5 weeks pay for every year you've worked at a company, do you still pay tax on the final sum?

I'm guessing yes but can't find the exact rules

 

[Crabtree]

It's tax-free up to about £30k

This is for redundancy and the exgratia payments. Pay in lieu of notice is taxable as normal.

 

[Micro Dave]

It's tax-free up to about £30k

This is for redundancy and the exgratia payments. Pay in lieu of notice is taxable as normal.

Cheers, I'd be nowhere near that mark unfortunately

 

[Tom]

No tax up to £30k. I think on statutory redundancy there's no way you can reach that much anyway.

Tax on other payments though if your eligible such as PILON and accrued holidays.

 

[Franco Pinion]

No tax up to £30k. I think on statutory redundancy there's no way you can reach that much anyway.

Tax on other payments though if your eligible such as PILON and accrued holidays.

I know last time I got redundancy they didn't tax me on ex Gratia payments either.

I can't remember the specifics but I got 3 weeks per year and an extra week for taking voluntary which was classed as ex Gracia as it wasn't contractual.

I was taxed on 12 weeks PILON.

 

[Tom]

I know last time I got redundancy they didn't tax me on ex Gratia payments either.

I can't remember the specifics but I got 3 weeks per year and an extra week for taking voluntary which was classed as ex Gracia as it wasn't contractual.

I was taxed on 12 weeks PILON.

Still tax-free up to £30k. Obviously also dependant on how many years you've worked there and how much you earn whether you hit the £30k.

Done well to get four weeks a year mind. They offered 2.5 at our place 12 months ago to any volunteers. They were after 2k people and got them (out of a 12k workforce).