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Post Info TOPIC: Redundancy Pay and Tax Code 0T
Don Tax


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Redundancy Pay and Tax Code 0T
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Hi, I want to process around £2,500 redundancy pay through the payroll before the P45 is issued.   Can I just confirm with anyone that this can be done simply as a non-taxable item?

In other words, I don't use the 0T tax code?

 

thanks peeps.

 

 

 



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RobH


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It really depends on what is in the contract of employment, people jump straight on to the idea that the first £30k is tax free but it ain't that simple! If in the contract there is a clause about redundancy it may well make it a taxable payment so be a bit careful!

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Rob
www.accounts-solutions.com
Don Tax


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Thanks for the warning Rob - that makes me wonder why ever a redundancy clause would be inserted.

This is one where there hasn't been a written contract and the reason for redundancy is reduced customers.

I think I'll just calculate redundancy pay on <£30,000 statutory lines. There's no back pay, holiday pay and the Notice will be as gardening leave so that's taxable.............. errr, usually lol




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