IHR - PILON and pension start date?

MargaretBella

Hi everyone

I’m wondering if anyone has experience of going through IHR and can help with two questions relating to my notice period - and notice pay - and save me the expense of an employment law solicitor when I’m on nil pay and struggling financially. I’ve given up on my union and I’ve had better advice from this forum that anywhere else when I’ve asked questions previously! I appreciate responses don’t constitute legal advice but they would help me greatly 🙏🏻

My employer has signed off my IHR and ended my contract with immediate affect but the info I’ve received on how this marries with notice is unclear. My first question is … I am to receive PILON which my employer says is taxable even though the sole reason for my contract ending is illness covered by DDA and IHR on the grounds of that illness. I’m uncertain if the disability tax exemption for contract terminations should apply here or if that is only applicable for ex gratis termination arrangements that are not PILON?

My second question is … my IHR kicks in immediately I’m told and will be backdated to the day after my contract ended. Is it correct that I can be receiving IHR and PILON overlapping for the contractual notice period (12 weeks)? I thought IHR could only commence once notice period expired?

Any advice / experience shared would be hugely appreciated. Thanks in advance 🙏🏻

Holly_Scope

Hi @MargaretBella I'm really sorry you didn't get an answer to this. Unfortunately it's not something I'm familiar with. I've found this in reference to the tax element on the Government website.

"The payment is simply the salary due for the period of notice and so taxable under section 62 ITEPA 2003 (see EIM00670), whether or not it is paid as a lump sum. In this case, the employment continues to the termination date whether the employee works or not."

The link to the website here - EIM12975 - Termination payments and benefits: payments in lieu of notice (PILONs) and gardening leave: general - HMRC internal manual - GOV.UK

Regarding the notice period, I have seen referenced 12 week notice period on a situation here - Ill Health Retirement and PILON — MoneySavingExpert Forum.

Hopefully you've got to the bottom of it now. If so, it'd be great to hear the outcome if you're happy to share. 🙂