Incorrect Info on Redundancy Calc

Hi,

After having been selected for redundancy by my employers I received my redundancy calculation statement at the weekend. At the end of the Payments in Lieu of Notice section there is a sentence that states 'These payments are a non-contractual entitlement and we have been advised that these payments can be made tax free'.

I have since received a question and answers paper from HR that states the Payments in Lieu of Notice are in fact subject to tax and national insurance deductions. After querying the contradiction with HR, I have been advised that the calculation statement was incorrect and that a revised one will be sent to me. As a 40% tax payer this will obviously make a huge difference to the amount I will actually recieve.

Is there any course of action I could take due to the incorrect information they provided me on the statement. I am actually due to attend my second and final one to one consultation with them tomorrow morning so any urgent advice would be greatly appreciated.

Thanks

Dear Rusty

You need to refer to your contract of employment and whether there is reference to in lieu of notice payments. If there isn't then the payments can be made tax free, if there is, then regretfully they are subject to tax and NI deductions.

I would ask HR to review your contract of employment to review this asap and before your second consultation. You do know that consultation can be extended if there are representations that are not responded to or clarified?

I would get HR to put the error in writing to you as well, not just the new payment calculations.

Hope this helps.

Best wishes

Carol

Thanks Carol,

I did actually receive the revised statement in the post today after I had posted my original thread.

My contract of employment does refer to notice of termination (1 week for every year if 4 years and above up to max of 12 weeks). However, it doesn't make any specfic reference to payments in lieu of notice and whether they are taxable or not. My main gripe was the fact that on the initial statement they stated PILON was tax free but have now indicated they are taxable.

Thanks

Rusty

Dear Rusty

Then if your contract does not have any reference to the Company reserving the right to pay you in lieu of notice I would challenge this in your consultations.

Good Luck

Carol