LRD guides and handbook May 2017

Law at Work 2017

Chapter 11

Redundancy payments and tax 



[ch 11: page 442]

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. 



Prior to the announcement of the snap election for June 2017, the government was proposing changes to the tax treatment of termination payments from April 2018 (see Chapter 10 , page 390).



LRD booklet: 
State benefits and tax credits 2017 — a trade union guide to in-work benefits
 (www.lrdpublications.org.uk/publications.php?pub=BK&iss=1869)