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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
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Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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I am being made redundant and as part of this I have a PILON

Resolved Question:

I am being made redundant and as part of this I have a PILON which is £16,000 would it be possible to move this 16,000 into my pension. I have used up the tax free first £30,000
Submitted: 1 year ago.
Category: Tax
Expert:  taxadvisor.uk replied 1 year ago.
Hello and welcome to the site. Thank you for your question.

A payment in lieu of notice would normally be taxable as it could arise from contractual agreement, customary or a payment for damages and are all employment related.

Contributions into a pension scheme carry tax relief as they are against earned income.
Provided this payment meets the criteria for tax allowable pension contributions i.e. 100% of earnings with a cap of £40k you would be able to move this £16,000 into a pension scheme.

I hope this is helpful and answers your question.

If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.

Customer: replied 1 year ago.

This is contractual notice period I was wondering if I could make a salary/pension sacrifice. My company say not

Expert:  taxadvisor.uk replied 1 year ago.
Nick, thank you for your reply.

If your company says no then I think there is little you can do to make a salary/pension sacrifice.

You could still move the amount you receive as a personal contribution into the pension scheme. You would have to liaise with the pension provider.

More information on salary sacrifice arrangements can be found here

https://www.gov.uk/salary-sacrifice-and-the-effects-on-paye

I hope this is helpful and answers your question.


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Expert:  taxadvisor.uk replied 1 year ago.
I thank you for accepting my answer.

Best wishes.

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