Bank holiday, are people mad

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pete75
Posts: 11704
Joined: 24 Jul 2007, 2:37pm

Re: Bank holiday, are people mad

Postby pete75 » 28 Aug 2019, 2:37pm

Bonefishblues wrote:
pete75 wrote:
Bonefishblues wrote:I didn't mention ex gratia payment because that would be illegal so not something I have ever done in the various payrolls I have run. Payment in lieu of holiday must attract tax under HMRC rules. The mechanism I alluded to v-a-v a simple additional payment would both attract tax and be free from any linkage to the WTD.

An ex gratia payment is any payment the employer is not contractually obliged to make and are not illegal.The simple additional payment you describe is ex gratia if it is not part of contractual remuneration. Moreover they are taxed if received received with normal monthly pay. If an ex gratia payment is made as part of a severance package then it is not taxable providing it is less than £30,000. In those circumstances they're often used to buy silence.

The normal status attached to an ex gratia payment is free of tax, hence my comments.

Primer, one of many here:
https://www.redmans.co.uk/ex-gratia-pay ... employees/

Yes and that is referring to ex gratia payments on termination of employment. These are treated in exactly the same way as redundancy payments ie tax free up to £30,000.
When I was running a payroll system for 16,000 people we not infrequently made ex gratia payments to people acting up, covering for staff on long term sick etc. These were taxed.

Bonefishblues
Posts: 6764
Joined: 7 Jul 2014, 9:45pm
Location: Near Bicester Oxon

Re: Bank holiday, are people mad

Postby Bonefishblues » 28 Aug 2019, 5:23pm

pete75 wrote:
Bonefishblues wrote:
pete75 wrote:An ex gratia payment is any payment the employer is not contractually obliged to make and are not illegal.The simple additional payment you describe is ex gratia if it is not part of contractual remuneration. Moreover they are taxed if received received with normal monthly pay. If an ex gratia payment is made as part of a severance package then it is not taxable providing it is less than £30,000. In those circumstances they're often used to buy silence.

The normal status attached to an ex gratia payment is free of tax, hence my comments.

Primer, one of many here:
https://www.redmans.co.uk/ex-gratia-pay ... employees/

Yes and that is referring to ex gratia payments on termination of employment. These are treated in exactly the same way as redundancy payments ie tax free up to £30,000.
When I was running a payroll system for 16,000 people we not infrequently made ex gratia payments to people acting up, covering for staff on long term sick etc. These were taxed.

I think you are using a broader definition of ex gratia than I do.

An ex gratia payment is by definition something that an employer has no duty to pay under contract - a gift, literally interpreted.

They are not (whether wrt severance or any other matters) taxable because they reflect something that isn't a liability related to their performance of service under their contract - i.e. work.

You weren't IMHO making ex gratia payments as you paid them net of tax, you were making the type of payment I alluded to earlier - simply payments in the ordinary course of employment.

pete75
Posts: 11704
Joined: 24 Jul 2007, 2:37pm

Re: Bank holiday, are people mad

Postby pete75 » 28 Aug 2019, 5:53pm

Bonefishblues wrote:
pete75 wrote:
Bonefishblues wrote:The normal status attached to an ex gratia payment is free of tax, hence my comments.

Primer, one of many here:
https://www.redmans.co.uk/ex-gratia-pay ... employees/

Yes and that is referring to ex gratia payments on termination of employment. These are treated in exactly the same way as redundancy payments ie tax free up to £30,000.
When I was running a payroll system for 16,000 people we not infrequently made ex gratia payments to people acting up, covering for staff on long term sick etc. These were taxed.

I think you are using a broader definition of ex gratia than I do.

An ex gratia payment is by definition something that an employer has no duty to pay under contract - a gift, literally interpreted.

They are not (whether wrt severance or any other matters) taxable because they reflect something that isn't a liability related to their performance of service under their contract - i.e. work.

You weren't IMHO making ex gratia payments as you paid them net of tax, you were making the type of payment I alluded to earlier - simply payments in the ordinary course of employment.


The only references I can find to ex gratia payments being tax free is in relation to termination of employment and then only up to £30,000. When I left my job last year I received an ex gratia payment in addition to statutory redundancy. £64,000 of it was taxed so I don't see how you can claim the payments are tax free. You may think that but HMRC think differently.

Do you really think ex gratia payments made during employment are tax free. If that were the case it would be a massive loophole in the tax system and many companies would be making a lot of ex gratia payments to staff, particularly those at the top. No need for fancy channel island based loan schemes or fake self employment etc.

Bonefishblues
Posts: 6764
Joined: 7 Jul 2014, 9:45pm
Location: Near Bicester Oxon

Re: Bank holiday, are people mad

Postby Bonefishblues » 29 Aug 2019, 8:13am

Only the first 30k of any ex gratia payment can be tax free. They are most often seen in redundancy payments, of course.

No loophole, just a set of rules that apply, which I outlined the essence of. Most payments in the course of employment are linked directly to individuals' employment and performance of services, so they aren't by definition ex gratia payments. HMRC keeps a pretty tight watch on them, including recently ruling that the former practice that 'pilon' unserved notice could no longer be classed as such a payment.

skyhawk
Posts: 296
Joined: 30 May 2019, 3:00pm

Re: Bank holiday, are people mad

Postby skyhawk » 29 Aug 2019, 2:23pm

Ben@Forest wrote:
661-Pete wrote:But....
Ben@Forest wrote:I have to say being autistic is not an excuse for the tone of the original post of this thread.

isn't that a bit out of order? Like many others, I guess, I wonder why Skyhawk needs to include the word "autistic" in nearly every post (as well as on his sig line). But I don't have the right to criticise. Perhaps it's his way of addressing the issue. Let him come in and explain!


I felt the post was gratuitously dismissive and shading on nasty. People could similarly excuse their words because of conditions, culture, environment, abuses suffered..... then anyone can excuse any attempt at civility.



If I understood what this was about I would reply :)

IF you were Autistic you would understand WHY I post I am..............
Both I and my son are Autistic. We have aspergers and ADHD, not stupid :). If I sound "blunt" in my posts, please be understanding : I am not perfect. Thank you. Visit https://www.asdinfowales.co.uk/ to learn more

pete75
Posts: 11704
Joined: 24 Jul 2007, 2:37pm

Re: Bank holiday, are people mad

Postby pete75 » 29 Aug 2019, 2:41pm

Bonefishblues wrote:Only the first 30k of any ex gratia payment can be tax free. They are most often seen in redundancy payments, of course.

That's exactly what I've been trying to tell you. I'm glad the message has finally got through. The £30,000 tax free limit is not because it's an ex gratia payment but because it's made as a redundancy payment, the first £30,000 of which is tax free.

Bonefishblues
Posts: 6764
Joined: 7 Jul 2014, 9:45pm
Location: Near Bicester Oxon

Re: Bank holiday, are people mad

Postby Bonefishblues » 29 Aug 2019, 4:09pm

pete75 wrote:
Bonefishblues wrote:Only the first 30k of any ex gratia payment can be tax free. They are most often seen in redundancy payments, of course.

That's exactly what I've been trying to tell you. I'm glad the message has finally got through. The £30,000 tax free limit is not because it's an ex gratia payment but because it's made as a redundancy payment, the first £30,000 of which is tax free.

There's no need for rudeness.

You have it the wrong way round, actually. That is what I've been trying to explain.

pete75
Posts: 11704
Joined: 24 Jul 2007, 2:37pm

Re: Bank holiday, are people mad

Postby pete75 » 29 Aug 2019, 11:44pm

Bonefishblues wrote:
pete75 wrote:
Bonefishblues wrote:Only the first 30k of any ex gratia payment can be tax free. They are most often seen in redundancy payments, of course.

That's exactly what I've been trying to tell you. I'm glad the message has finally got through. The £30,000 tax free limit is not because it's an ex gratia payment but because it's made as a redundancy payment, the first £30,000 of which is tax free.

There's no need for rudeness.

You have it the wrong way round, actually. That is what I've been trying to explain.


Neither is there a need for over sensitivity.

No I haven't. The first 30,000 of any redundancy payment is tax free be it ex gratia or a contractual obligation. The tax free element is because the ex gratia payment forms part of a redundancy package. How do you think a non ex gratia redundancy payment is taxed?

Bonefishblues
Posts: 6764
Joined: 7 Jul 2014, 9:45pm
Location: Near Bicester Oxon

Re: Bank holiday, are people mad

Postby Bonefishblues » 30 Aug 2019, 8:46am

pete75 wrote:
Bonefishblues wrote:
pete75 wrote:That's exactly what I've been trying to tell you. I'm glad the message has finally got through. The £30,000 tax free limit is not because it's an ex gratia payment but because it's made as a redundancy payment, the first £30,000 of which is tax free.

There's no need for rudeness.

You have it the wrong way round, actually. That is what I've been trying to explain.


Neither is there a need for over sensitivity.

No I haven't. The first 30,000 of any redundancy payment is tax free be it ex gratia or a contractual obligation. The tax free element is because the ex gratia payment forms part of a redundancy package. How do you think a non ex gratia redundancy payment is taxed?

You seem compelled to pop these little barbs into your posts. They do nothing to assist a debate, or understanding, they only irritate, whatever one's level of sensitivity. I offered the feedback, you chose to respond thus.

pete75
Posts: 11704
Joined: 24 Jul 2007, 2:37pm

Re: Bank holiday, are people mad

Postby pete75 » 30 Aug 2019, 10:22am

Bonefishblues wrote:
pete75 wrote:
Bonefishblues wrote:There's no need for rudeness.

You have it the wrong way round, actually. That is what I've been trying to explain.


Neither is there a need for over sensitivity.

No I haven't. The first 30,000 of any redundancy payment is tax free be it ex gratia or a contractual obligation. The tax free element is because the ex gratia payment forms part of a redundancy package. How do you think a non ex gratia redundancy payment is taxed?

You seem compelled to pop these little barbs into your posts. They do nothing to assist a debate, or understanding, they only irritate, whatever one's level of sensitivity. I offered the feedback, you chose to respond thus.


Actually I was merely responding to your irritating little barb. Stones and glasshouses come to mind.

Bonefishblues
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Joined: 7 Jul 2014, 9:45pm
Location: Near Bicester Oxon

Re: Bank holiday, are people mad

Postby Bonefishblues » 30 Aug 2019, 10:27am

I think I'll call a close to this - the last word was yours.

Tangled Metal
Posts: 5664
Joined: 13 Feb 2015, 8:32pm

Re: Bank holiday, are people mad

Postby Tangled Metal » 30 Aug 2019, 11:40am

Oh isn't it time we sorted this argument out? There's only one way to do that.

Fight! Fight! Fight!

This approach works on Harry Hill's programmes so might work here! :wink:

User avatar
Cugel
Posts: 2454
Joined: 13 Nov 2017, 11:14am

Re: Bank holiday, are people mad

Postby Cugel » 30 Aug 2019, 12:37pm

Tangled Metal wrote:Oh isn't it time we sorted this argument out? There's only one way to do that.

Fight! Fight! Fight!

This approach works on Harry Hill's programmes so might work here! :wink:


I suggest wet arm-warmers 'round the back of the bike shed. First to cry real tears or shout for 'is mam when given a particularly stinging arm-warmer slap on the bare leg is the loser.

Cugel

Tangled Metal
Posts: 5664
Joined: 13 Feb 2015, 8:32pm

Re: Bank holiday, are people mad

Postby Tangled Metal » 30 Aug 2019, 12:43pm

Cugel wrote:
Tangled Metal wrote:Oh isn't it time we sorted this argument out? There's only one way to do that.

Fight! Fight! Fight!

This approach works on Harry Hill's programmes so might work here! :wink:


I suggest wet arm-warmers 'round the back of the bike shed. First to cry real tears or shout for 'is mam when given a particularly stinging arm-warmer slap on the bare leg is the loser.

Cugel

With that type of activity, are you not a Tory MP?

pete75
Posts: 11704
Joined: 24 Jul 2007, 2:37pm

Re: Bank holiday, are people mad

Postby pete75 » 30 Aug 2019, 4:17pm

Cugel wrote:
Tangled Metal wrote:Oh isn't it time we sorted this argument out? There's only one way to do that.

Fight! Fight! Fight!

This approach works on Harry Hill's programmes so might work here! :wink:


I suggest wet arm-warmers 'round the back of the bike shed. First to cry real tears or shout for 'is mam when given a particularly stinging arm-warmer slap on the bare leg is the loser.

Cugel


12 bore shotguns at 30 yards would be my choice. No 4 shot. :lol: