ex-gratia payments

[Fulton]

My wife may receive an ex-gratia payment as a consequence of an employment issue. Is this subject to income tax and NI contributions as a wage would be?

[NORMANTHEDOG]

it depends on who its from,i receive one from the goverment,for a injury i sustained in their employment,i dont pay tax or ni on it,its classed as a pension.

[Cennet]

Its all according what it was for

If it was part of a negotiated settlement for her to leave the company, and either an Acas agreement or a compromise agreement was entered into, then its normally tax free up to �30,000

If its "pay" then it should be subject to tax and NI. If its pay in lieu of notice, then it may be subject to tax and NI but you need to look at her terms and conditions of employment to see if its a contractual term or not.

You can get more advice from the Acas helpline on 08457 47 47 47