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Chapter 8
Taxation
[ch 8: page 68]Redundancy pay is tax free up to £30,000. HMRC has produced a Redundancy fact sheet on its website at: www.hmrc.gov.uk/guidance/redundancy-factsheet.pdf.
Negotiators should take care when negotiating settlements and take professional advice if in doubt. The High Court has held that negotiated settlements are not always payments of damages for breach of contract. This means that they may attract liability to tax (Richardson (Inspector of Taxes) v Delaney [2001] IRLR 663).