Redundancy
MVT
Registered Posts: 41 💫 🐯 💫
Hi everyone,
One of my directors was made redundant in November last year - well it was more of a mutual agreement to be honest! There were a number of payments due to her and the other directors decided to pay her redundancy using the £30,000 tax free option.
My question is although there is no tax implications involved does she need to declare the payment to HMRC?
This wasn't paid through the payroll - we are paying it by 6 monthly installments.
Many thanks,
One of my directors was made redundant in November last year - well it was more of a mutual agreement to be honest! There were a number of payments due to her and the other directors decided to pay her redundancy using the £30,000 tax free option.
My question is although there is no tax implications involved does she need to declare the payment to HMRC?
This wasn't paid through the payroll - we are paying it by 6 monthly installments.
Many thanks,
0
Comments
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Good question. I don't believe it's declarable direct to HMRC. It would be declared in a note to the accounts under "compensation to past directors for loss of office".
It's only tax free if it's ex-gratia, i.e. there is no provision for it in their contract.0 -
Thanks Monsoon - that's what I thought.
The directors and I checked her contract before the proposal was made and there is definitely no provision in her contract for this.0
