Settlement Agreement Lawyers & Solicitors – Redundancy

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Employment Law, Redundancy, Payment in Lieu of Notice, Tax, National Insurance

April 10th, 2012 · 2 Comments · Compromise Agreement Solicitor, Compromise Agreement Solicitors, Compromise Agreements, Employment Lawyers, Employment Solicitors, HMRC, Indemnity, National Insurance Contributions, Payment in Lieu of Notice, Redundancies, Redundancy, Redundancy law, Redundancy Pay, Taxation

As employment law solicitors, we regularly advise on redundancies and have encountered situations where employers would like to make redundancy payments, which include payment in lieu of notice (PILON). Where this occurs, it is normally stated in a compromise agreement that part of the redundancy pay is for notice pay. We would like to reiterate that PILON is subject to tax and national insurance and HM Revenue & Customs (Inland Revenue) has the right to demand these where they have not been paid or there has been a miscalculation. There is therefore a risk that Inland Revenue could demand tax and national insurance from employers and as a consequence, employees would have to indemnify their employers.

If you require further information about UK employment law or seek clarification with regards to provisions contained in your compromise agreement, 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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2 Comments so far ↓

  • thui

    what did they mean if they say my salary is in lieu on my annual increase.

  • Melanie

    Hi, can you tell me please if you are paid in lieu of notice as part of a redundancy Package what would be the date of termination of employment would it be the last day of work or the last day of notice period? Also is there a time limit in putting in a complaint of discrimination due to disability?

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