If so whats the calculation?

For redundancy isnt the 1st 30k non taxeable but then it is taxeable after that?

I dont think she will be getting over 30K so should be tax free?

1st 30k is tax free, but only if a specific redundancy payout isn't in your terms and conditions.

1st 30k is tax free

Only if it is in leiu of notice. If you're on 3 months notice and leave straight away, the three months pay is taxable. Any enhancements or statutory is tax free.

Sorry yeh should have made that more clear. Lots of companies will pay some money in lieu of notice which will be taxeable.

You will then have the government statutory redundancy or the company specific redundancy payment which for example could be one months salary for each year of service etc so this would depend on the individual company but this would be tax free.

It's "Tax Free" in that tax isn't deducted at source. But if you fill in an annual tax return you have to declare it as income and will therefore be taxed on it at some point.

Not sure you're right DWH. It's either taxable or not.

I can't imagine it's the case that, if you don't fill a return in you're okay, but if you do you get taxed.

If it is liable for tax they would process it through PAYE before you get it.

Compensation (up to £30k) can be paid free of tax* – i.e. the redundancy payment. Whereas any accrued holiday pay or PILON would be subject to the 'usual' deductions.

* Income Tax (Earnings & Pensions) Act 2003 (s.403)

DWH is wrong

http://www.direct.gov.uk/en/Diol1/DoItOnline/DG_4017972

This might help

soma_rich – if you're asking how the actual payment is detirmined there is a formula for calculating the statutory entitlement – which uses length of service, age and week's pay.

NB. the week's pay is capped by statute, but if the contract provides more generous redundancy provision that will apply (some contract of employment provide the same formula is used but without the cap on a week's pay).

As stated earlier, any contractural payments such as payments of holiday pay or payments in lieu of notice are liable to tax. Statutory redundancy, ex-grata payments or settlement amounts are tax free up to £30,000, any excess is taxable at normal rates. PAYE will be applied to any taxable element.