Contractual payments must be made subject to usual deductions for tax and national insurance. Whereas a genuine ex-gratia payments are not made for work that has been undertaken or for a provision of services or under a contract of employment and are essentially compensation for loss of employment or a “gift” by the employer. Consequently they can be paid free of tax up to £30,000 pursuant to section 403 of the Income Tax (Earnings and Pensions) Act 2003.
2021 was a year fraught with uncertainty. Many sectors were closed for most of the year, compounding losses and hardships carried forward from 2020. There were, however, notable highlights. The extension of the Furlough Scheme kept many in employment and the Autumn saw widespread returns to workplaces for those able to work from home. 2022…Read More