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Employment - notice & payment in lieu

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Barquentine | 10:25 Wed 09th Nov 2011 | Civil
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Have you or do you know anyone who has been given an "ex gratia payment equivalent to x (months) notice entitlement"?
If you do reply here - I may have a nice surprise for you!

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Such payments are really quite common, Barquentine - particularly when they form part of an overall severance separation payment, part of which is in lieu of notice and the rest is redundancy.
Perhaps you are about to tell us that such payments can normally be structured such that no income tax or NI is payable on them.
Yes, it's commonly referred to as PILON.
I recall from a previous thread on this topic that buildersmate disagrees with me on this point but I regard it as a bit of an anomaly that someone who doesn't have to work their notice and receives tax-free PILON is better off financially than someone who has to work their notice and pay income tax.
(Yes, I know there are legal reasons about it being a compensation payment rather than a contractual salary payment)
Are we going to learn if your 'nice surprise' is that guessed at?

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