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Where Taxpayers and Advisers Meet

Termination Payment

amitr19
Posts: 161
Joined: Wed Aug 06, 2008 4:00 pm

Termination Payment

Postby amitr19 » Wed Feb 07, 2018 10:58 am

Hi All - grateful for any advice.

Is voluntary severance payment the same as an ex-gratia payment?

An ex employee was paid £44,000 as termination payment. This was made up of :

- £9000 Statutory redundancy
- £8000 PILON (non-contractual)
- £27000 Voluntary Severance (calculated 3X of statutory redundancy as per organisation policy)

What's taxable?

Thanks
AR

SteLacca
Posts: 437
Joined: Fri Aug 07, 2015 2:17 pm

Re: Termination Payment

Postby SteLacca » Wed Feb 07, 2018 5:16 pm

What does he contract of employment say about them?

amitr19
Posts: 161
Joined: Wed Aug 06, 2008 4:00 pm

Re: Termination Payment

Postby amitr19 » Thu Feb 08, 2018 10:21 am

contract is silent for all 3 of them.

SteLacca
Posts: 437
Joined: Fri Aug 07, 2015 2:17 pm

Re: Termination Payment

Postby SteLacca » Thu Feb 08, 2018 2:38 pm

Where the contract is silent, the starting point should be that only the excess over £30,000 of the total is taxable. (i.e. £14,000).

However, note that the rules are changing from April 2018.


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