What tax is payable on redundancy payments ?
The Statutory Redundancy payment can be paid tax free. With regard to any sum paid over and above the Statutory entitlement the following needs to be considered. (a) Notice period – this is a contractual entitlement and therefore is taxable. (b) Ex-gratia redundancy payment – in addition to the notice and Statutory Redundancy payment if there is any further payment being made to the employee as a redundancy payment it must be taxed. However there are attractive tax relief available but these require specialised knowledge and calculation. (c) Any additional benefit such as a car, laptop computer must also be included in any calculation for tax purposes.
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