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Ex Gratia Payments

A settlement agreement normally includes a payment made by the employer to the employee. A termination payment is sometimes also known as a compensation payment, severance payment (particularly in the US) or an "ex-gratia" payment.

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.

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Further Adjustments to UK Immigration Criteria

Tier 2 Sponsors and Tier 2 Sponsored Workers Salary reduction for Tier 2 sponsored workers In circumstances where a business cannot pay the salaries of sponsored workers because of a reduction in trading, the salary of sponsored migrants can be reduced to 80% of their salary or £2,500 per month, whichever is the lower. This…

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Legal Right to Work Checks

The Home Office has issued new guidance on Legal Right To Work (LRTW) checks in light of COVID-19. The key points are that as of 30 March 2020 the following temporary changes have been made: Checks can now be carried out over video calls Job applicants and existing workers can send scanned documents or a…

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COVID-19

The UK Home Office has issued further guidance in respect of immigration provisions for UK migrants both inside and outside of the UK, in light of COVID-19. Migrants currently in the UK Visas expiring between 24 January 2020 – 31 May 2020 Individuals who are in the UK legally and whose UK visa is due…

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