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 Migration Advisory Committee (MAC) has been commissioned by the UK Government to assess the range at which salary thresholds should be set for sponsored migrants in the context of the future post-Brexit immigration system, due to be launched in 2021. In addition the committee has been asked to provide evidence based recommendations on how…Read More