Taxation of redundancy payment with less than 2 years service

If I was to be made redundant and had less than two years service (i.e. am not entitled to statutory redundancy), but nevertheless got a payment from my employer, can that payment still make use of the basic exemption on tax?

Also, would it matter if I was an owner/director of the company employing me?

It's not entirely clear from the information I've read so far what the situation might be.

Have you already read this Revenue booklet?

[broken link removed]

Have you checked the DETE website?

Redundancy Payments

Yes, but it's not clear.

For example:

"Your redundancy or retirement lump sum is exempt from tax if:

• It is a statutory redundancy payment (this is an individual�s statutory entitlement under employment legislation)

However, you only get statutory redundancy if the period of employment was over two years.

It also says:

"The following redundancy and retirement payments, although not exempt from tax, qualify for some relief from tax.
These are: [..missinge text here, and then: ] Non-statutory redundancy payment i.e. the amount payable by your employer, which is over and above the statutory redundancy payment. "

In other words, this is for amounts over and above statutory payments. I can't find reference anywhere to the situation I described (i.e. not receiving statutory redundancy, but getting some payment in any case).

I suspect that non statutory redundancy payments are assessable in full for tax and may also be subject to PRSI/health levy. These days the employer is usually obliged to deduct such liabilities at source on BIK payments so I wonder if the same applies here?

You may use your basic exemption against any termination payment, even if you have not been with for two years.

Nige said:

You may use your basic exemption against any termination payment, even if you have not been with for two years.

Click to expand...

Thinink about it, that would seem to be the logical thing alright, but I'm not sure logic and the Revenue are always intimate bed-fellows!

Thanks, anyway.