Settlement Agreement Lawyers & Solicitors – Redundancy

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Employment Law, Redundancy, Compromise Agreements, Payment in Lieu of Notice, Tax

March 16th, 2012 · No Comments · Compromise Agreement Solicitor, Compromise Agreement Solicitors, Compromise Agreements, Contract of Employment, Employment Lawyers, Employment Solicitors, HMRC, Independent Legal Advice, Payment in Lieu of Notice, Redundancies, Redundancy, Redundancy law, Redundancy Pay, Taxation

When advising employees on their redundancy rights and the terms of their compromise agreements, we are seeing situations where employers are including payment in lieu of notice (PILON) in employees’ redundancy payments. Any PILON is taxable and an employer does not have to make a PILON unless there is a provision in the employee’s employment contract. An issue that may arise where an employer does include a PILON with an employee’s redundancy pay to make one payment is the risk that this could be investigated by HM Revenue & Customs (Inland Revenue), possibly resulting in the employee having to pay any tax owing.

If you require further information about UK employment law or seek clarification with regards to payment in lieu of notice, please contact us at 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.

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