Maximising Redundancy payoff

[danash]

Am just about to be made redundant and work for an American company that doesnt really pay anymore than they are legally obliged to in payments.

I am looking to maximise the payoff and have a few questions...

Can I 'forego' accumulated holiday pay and ask them to make an 'ex gratia' payment instead ?

Can I do the same with outstanding commissions...not include them in payroll and ask to roll into the ex gratia...?

Am I right in thinking that Notice in lieu can be taken completely tax free if you are not required to work that notice ?

Any other hints would be welcome....the irony of making it through the recession and then being made redundant is supreme.

 

[Setanta12]

Very unlikely you can get an American or any large employer to agree personal terms with you, it could open them up to larger liabilities/lawsuits down the line. Most of what you mention is already taken care of in tax-legislation i.e. any part of your package already 'earned' (/contracted for or provided for) will be treated as 'earned' income.

Pay In Lieu Of Notice, PILON, in old days, if NOT provided for in your contract, could have been tax-free but I think/think/think this was closed off some years ago - I stand to be corrected though. If it is in your contract, it will be taxed as normal wages.

 

[dublin66]

I've spent a lot of time working in this area and I totally agreed with Kildavin. Once a payment in contractual it is taxable as normal salary. Statutory redundancy is tax exempt without exception.

Taxation of PILON hasn't changed. If it contractual (i.e. in your contract) it is taxable as normal. If it is under legislation it is taxable as a termination payment and can qualify for basic/increased exemption and SCSB etc.

Only comment on the employment front is that are you sure that it is a true redundancy as defined in legislation - is your job ceasing to exist? If not you may be in an unfair dismissal situation and then you much better leverage power and a chat with an employment solicitor may be worthwhile.

 

[danash]

I've spent a lot of time working in this area and I totally agreed with Kildavin. Once a payment in contractual it is taxable as normal salary. Statutory redundancy is tax exempt without exception.

Taxation of PILON hasn't changed. If it contractual (i.e. in your contract) it is taxable as normal. If it is under legislation it is taxable as a termination payment and can qualify for basic/increased exemption and SCSB etc.

Only comment on the employment front is that are you sure that it is a true redundancy as defined in legislation - is your job ceasing to exist? If not you may be in an unfair dismissal situation and then you much better leverage power and a chat with an employment solicitor may be worthwhile.

Thanks for that....my contract does have the termination clause so it looks like no way to avoid that.

As for the valid redundancy they are closing down a european sales role and tasking the US team to respond. I will look to make them offer me the US role but it is not realistic to move so I think I will end up redundant. I am not sure if the company will survive next year anyhow hence I want to max out the payout now.

Thanks for the help...