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An employee is to be made redundant. He is entitled to six months’ notice, but expects to receive pay in lieu of notice of about £16,000. Furthermore, the employer would have paid pension contributions of £4,000 and is willing to pay this to the employee as well
My client has been told that he is to be made redundant soon. He is entitled to a notice period of six months but he expects to receive a payment in lieu of notice (PILON) twice the statutory redundancy (about £16 000) and a further payment in respect of pension contributions his employer would have made into his pension fund during his notice period (about £4 000).
I am aware that the PILON is likely to be treated as a contractual payment and taxable in full. The doubling of the statutory redundancy payment seems to be something that would be covered by the £30 000 exemption. If I am correct on that I am left with two questions.
First if that £4 000 is paid to my client instead of being paid into a pension fund is it eligible for the £30 000 exemption...
Please reach out to customer services at +44 (0) 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance.
