Redundancy payments and tax 


Redundancy pay (both statutory and contractual) is tax free up to £30,000. However, employees and reps must be cautious, especially because “emoluments” (such as wages or notice pay) within a settlement will be taxable as earnings (Richardson (Inspector of Taxes) v Delaney [2001] IRLR 663). Negotiators should take professional advice if in doubt. 


The government has announced that changes will be made to the tax treatment of termination payments from April 2018.