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.
ACAS, the statutory conciliation service, has reported a 21% increase in the number of Early Conciliation notifications it received in 2018/19. Making an Early Conciliation notification is the first step a potential claimant must take if they intend on issuing certain claims against their employer. Once the Early Conciliation notification has been made, ACAS will…Read More