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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 have recently had my overseas contract terminated and been

Customer Question

I have recently had my overseas contract terminated and been given a payment in lieu of notice do I need to declare and may tax on this sum?
Submitted: 3 months ago.
Category: Tax
Expert:  taxadvisor.uk replied 3 months ago.

Hello and welcome to JustAnswer. I am here to help you. I will review your question and will respond to you shortly.

Expert:  taxadvisor.uk replied 3 months ago.

Thank you for your question.

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).

https://worksmart.org.uk/work-rights/pay-and-contracts/notice-periods/my-notice-pay-taxable

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.

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Expert:  taxadvisor.uk replied 3 months ago.

Hi there, just checking to see if you need further clarification or have I covered all points raised by you.

Many thanks

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