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 UK Home Office has provided employers with latitude in meeting Legal Right to Work (LRTW) Compliance requirements during the COVID-19 pandemic through a series of concessions. One such concession enables employers to conduct right to work checks remotely, thus not requiring employees or HR personnel to be physically present in an office for the…Read More