Hope someone can clarify:
My company has just has to get rid of a member of staff basically for non performance, but his positon is not going to be refilled. He has been with us for only 11 months and has been operating without a contract. In order to "see him right" we are going to pay him effectively 3 months salary.
Our payroll company is telling me that this is all taxable as he doesn't qualify for redundancy as he has been with the company less than 2 years, and his pay off is effectively in lieu of notice and therefore taxable.
If its a non contractual severance payment is he correct in his assertion?
Thanks in advance for any help.
R
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