Compromise Agreement Solicitors & Lawyers » Taxation

Employment Law, Indemnity, Tax, Compromise Agreement

admin — Wed, 11 Jan 2012 09:56:16 +0000

Usually there is a tax indemnity in a compromise agreement, meaning if Her Majesty’s Revenue & Customs (formerly Inland Revenue) makes claims for penalties from an ex-employer, the ex-employee has to indemnify the ex-employer for any taxes due. This would apply if for example, there has been a miscalculation of taxes payable under the compromise agreement.

It is advisable to have a provision in the compromise agreement to the effect that, in the event that Her Majesty’s Revenue & Customs issues a penalty against the ex-employer in relation to the ex-employee, the ex-employee then has the opportunity to discuss the penalty with the revenue services (at the employee’s cost) before the ex-employer makes payment.

If you require further information about redundancy law, please contact us at enquiries@rtcooperssolicitors.com or visit one of the following pages on employment law:

© RT COOPERS, 2012. This Briefing Note does not provide a comprehensive or complete statement of the law relating to the issues discussed nor does it constitute legal advice. It is intended only to highlight general issues. Specialist legal advice should always be sought in relation to particular circumstances.

Employment Law, Redundancy, Holiday, Payment in Lieu of Notice

admin — Tue, 10 Jan 2012 14:35:38 +0000

With regards to compromise agreements, it is always advisable to clearly set out any untaken accrued holidays and payment in lieu of notice and to show these separately, as they are both taxable.

If you require further information about redundancy law, please contact us at enquiries@rtcooperssolicitors.com or visit one of the following pages on employment law:

Employment Law, Redundancy, Payment in Lieu of Notice, Settlement Payment

admin — Wed, 14 Dec 2011 08:51:05 +0000

In order for an employer to provide an employee with payment in lieu of notice, this must be referred to in the employee’s employment contract. Some employers are incorporating the notice period as part of the settlement payment, which is tax free. We always advise that there is a risk that Inland Revenue may decide that this amount may in fact be taxable.

If you require further information about redundancy law, please contact us at enquiries@rtcooperssolicitors.com or visit one of the following pages on employment law:

© RT COOPERS, 2011. This Briefing Note does not provide a comprehensive or complete statement of the law relating to the issues discussed nor does it constitute legal advice. It is intended only to highlight general issues. Specialist legal advice should always be sought in relation to particular circumstances.

Employment Lawyers Compromise Agreements – Severance Compensation – PILON

admin — Sun, 13 Jun 2010 09:18:23 +0000

We are receiving a number of enquiries where employers are only offering employees Payment in Leiu of Notice (PILON) as their compensation for loss of employment.

Typically employers are paying Severance Compensation as follows:

The employer will on its own behalf, and on behalf of all its associated companies, without any admission of liability whatsoever pay the employee £[anything up to 12/18 months salary] as compensation for loss of employment and in respect of the employee claims, less such deductions for tax and employee National Insurance contributions as are required by law. This compensation is inclusive of a statutory redundancy payment of £[minimum statutory payment]calculated as follows: £380 gross weeks’ pay x [number of years] complete years’ service x [x] age multiplier.
In addition, the employer shall pay the employee the sum of £[contractual notice period] in lieu of the employee’s contractual notice period, less normal deductions for tax and National Insurance contributions.

If you require further information please contact us at enquiries@rtcooperssolicitors.com or visit one of the following pages on employment law:

© RT COOPERS, 2010. This Briefing Note does not provide a comprehensive or complete statement of the law relating to the issues discussed nor does it constitute legal advice. It is intended only to highlight general issues. Specialist legal advice should always be sought in relation to particular circumstances.

Compromise Agreement Solicitors – Taxation of Termination Pay

admin — Sat, 07 Nov 2009 07:37:28 +0000

We are still being asked about taxation of Settlement Payment or some people refer to it as Termination Payment.

The correct advice is that the first £30,000 of an employee’s Termination Payment will be paid without deduction of income tax in accordance with section 403 of the Income Tax (Earnings and Pensions) Act 2003. If an employee’s Settlement or Termination Payment is over £30,000, then your employer will make deductions of income tax at the basic rate of 20% in respect of the balance of the Termination Payment over £30,000.

RT Coopers Solicitors can advise you in this regard. Contact enquiries@rtcooperssolicitors.com for a meeting or more specialist advice. We will give you an indication of our costs.