90 days notice

[Ticktockwedontstop]

I have been given 90 days notice of redundancy but my employer is closing our office 6wks before that date and is making a payment in lieu of working. When calculating my redundancy payment should they base the length of service on the date I finish up or the last day of the notice period?

[prh47bridge]

Last day of the notice period.

[daisychain01]

Yes, prh, and ticktock please ensure your period in lieu of notice is untaxed.

Even though you won't be working then, the notice period still forms part of your redundancy. If for whatever reason they tax you by mistake, don't worry just call the tax office and they will refund you.

Speaking from experience.

[Ticktockwedontstop]

Thank you daisy & pry for your replies. It's rubbish as I would have a further full year service if it was the last day of the notice period so an increase in my payment.

[prh47bridge]

So it is a good job it is the last day of the notice period then. You will get your increase.

[HermioneWeasley]

I don't think the tax advice about pay in lieu is correct . It's a contractual entitlement and therefore subject to tax and NI in the normal way.

daisy I don't know how you managed to persuade HMRC that yours should be included in the £30k allowance, but it's extremely unusual.

[LIZS]

If you find out can you post please? My PILON plus pay for outstanding holiday was taxed and ni deduced. Redundancy payment itemised separately and was not.

[prh47bridge]

If there is no contractual right to PILON it is usually tax free up to £30,000. If there is a specific clause in the contract entitling the employee to PILON or giving the employer discretion as to whether or not it is paid it will usually be taxed.

[flowery]

Yes, if there is provision in the contract to PILON then it is taxable in the normal way, and holiday pay would always be taxable - these are contractual payments and subject to tax and NI just like salary.

If there is no provision to PILON in the contract, that means the employer is effectively breaching the contract by terminating immediately and the resulting payment is basically compensation for the breach. It's not therefore a contractual payment and is not taxable.

Most employers have PILON clauses in contracts these days so it's unusual for it to be paid tax-free.

[Ticktockwedontstop]

Thanks everyone. I have a feeling pilon will be in my contract so will be taxed for that period. On a positive the relevant end date for pilon is my last day of notice so another yrs service to my redundancy payment