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If the payment in lieu of notice is contractual then it is taxable income and income tax is chargeable on this payment.
If there is no clause in the contract and no implied term then the PILON can be paid NI free & tax free to the £30 000 exemption limit.
Attached are a couple of documents you will find helpful (look at payment in lieu of notice and foreign service (article in Taxation).
I hope this is helpful and answers your question.
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Hi there, just checking to see if you need further clarification or have I covered all points raised by you.