LRD guides and handbook May 2018

Law at Work 2018

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Chapter 11

Redundancy payments and tax 




[ch 11: page 410]

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 are taxable as earnings (Richardson (Inspector of Taxes) v Delaney [2001] IRLR 663). Negotiators should take professional advice if in doubt. In April 2018, the tax treatment of notice pay changed. See Chapter 10, page 317. 





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