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Virat’s employment with Shuler plc was terminated during the tax year 2016/17 and Virat was made...

Virat’s employment with Shuler plc was terminated during the tax year 2016/17 and Virat was made redundant on 1 December 2016. Virat received statutory redundancy pay of £5,000. Virat also received an ex gratia payment (i.e. a discretionary payment) of £12,000 from Shuler plc as compensation for loss of employment. What, if any, amount would be taxable in the tax year 2016/17?

A. £5,000

B. £17,000

C. £0. Both of the amounts would be fully exempt

D. £12,000

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Answer #1

Option C is correct .As per Income Tax (Earnings and Pensions) Act 2003 None of the amounts will be taxable as they are less than GBP 30000

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