Compensation sums – sometimes referred to as Ex gratia Payments or Redundancy Payments – can usually be paid tax free up to a maximum of £30,000. Other sums including notice monies, holiday pay, bonuses, wages and any other payments made in accordance with the contract of employment will always be subject to the normal income tax and national insurance deductions. We can advise you on whether the sums you are being offered are – or could be – properly classed as Compensation and thus attract the benefit of the £30,000 tax exemption.