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.
The Covid-19 pandemic forced businesses to re-think their work location practices, with the majority adopting technological solutions at new speed to facilitate staff working fully remotely or on a hybrid model. As a result many jobs can now be worked from almost anywhere – resulting in “dedicated workspace” becoming a feature on Airbnb accommodation adverts!…Read More