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