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How are the different components of a redundancy package dealt with for tax and NIC purposes?

April 26, 2017components dealt different NIC package purposes redundancy tax

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How are the different components of a redundancy package dealt with for tax and NIC purposes?

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• Unpaid salary and holiday pay are earnings for tax and NICs. • Redundancy payments are tax-free up to £30,000 (see EIM13750) and not liable for NICs (see NIM02580). Note that in some situations the £30,000 is reduced (see EIM13530) • For payments in lieu of notice the position can be complex: see EIM12975-9. The NICs position follows that for tax.