Changes to redundancy pay and payments in lieu of notice

It has been confirmed that statutory redundancy pay will rise from April 2018.

The new limits will apply where the date of termination is on or after 6 April 2018.
• £508 will be the maximum amount of a week’s pay for calculating statutory redundancy pay
• £15,240 will be the maximum statutory redundancy payment

There is also a change to the way payment in lieu of notice is taxed from 6 April 2018 .
Where termination and payment occur on or after 6 April 2018 and notice is not worked, the payment will need to be divided up into an amount representing notice pay (which will be subject to income tax and Class 1 NICs) and the remainder of the payment (payable free of tax and NICs up to £30,000 if payable as compensation for loss of employment).
These new rules will not apply to redundancy payments which will remain free of tax and Class 1 NICs up to £30,000