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My wife has been asked by her employer to retire two months ahead of her planned date, and in return accept an ex-gratia payment of £2,500. There are some office politics going on which I won't go in to. The employer says this payment won't be taxed, as it's ex-gratia. They want a letter from her agreeing to the earlier retirement date.
My initial fear was that there’s no way to be sure she will get the payment, as it’ll go through her normal payslip presumably as she leaves. My second concern was whether it could really escape Tax & NI deductions. What are your thoughts? Should her letter accepting an earlier retirement date refer to the ex-gratia payment?
My initial fear was that there’s no way to be sure she will get the payment, as it’ll go through her normal payslip presumably as she leaves. My second concern was whether it could really escape Tax & NI deductions. What are your thoughts? Should her letter accepting an earlier retirement date refer to the ex-gratia payment?