Dodgy Redundancy payment

Hi
I'm being made redundant (compulsory). I received my first letter last week and should be beginiing my notice period this week, however my employer has offered me the following:

agree that I was first notified 3 months ago (my notice period)..he will 'backdate' the letters required
he will then ADD what I should be getting for pay in lieu of notice to the redundancy payment saying that this way it won't be taxed.

is this correct?
is this legal?
financially it makes sense to take it but what are the implications?

Hmmm. Yes and no. If you are paid in lieu of notice and there is no contractual right for your employer to do so, either explicitly in your contract or by well-known custom and practice, then doing that is breach of contract and the payment would technically be damages, which are not taxable to a maximum of £30k.

However your employer seems to be asking you to pretend you were in fact given your contractual notice and that your contract was therefore not breached. If you definitely were not told 3 months ago, have just been told and your employer wants to terminate immediately, and if there is no contractual right to do so, then yes it should be tax-free, but the correspondence should reflect what's actually happened.

thank you Eleanor.

That clears things up in my mind. I don't think my employer will want to put any of this in writing as he told me to keep it strictly confidential! Sounds like a tax dodge to me.