Upgrade to Tax Free Allowance on Termination?
by Philip
The tax free allowance on termination for employees has been stuck at £30k for as long as I can remember. There has been no annual upgrading of this allowance as there has been for, say, redundancy payments or unfair dismissal compensation. This means that the concept of fiscal drag applies as inflation degardes the value of £30k year on year.
What prompts this post is a little clause in this years Finance Bill (section 49 to be precise) which amends section 291 of the 2003 Income Tax Act to ensure that the Mayor of London and Members of the GLA receive a tax free payment when they are relieved of their offices by a (no doubt) grateful electorate.
Is there any reason why Ken Livingstone should be paid his £69k tax free, when lesser (or greater) mortals would pay £15,600 tax on the same redundancy payment.
If you look at it logically, MPs and Mayors have greater job security than the majority of the population, the majority of the population are a notice period away from unemployment (say 12 weeks), MPs are a parliamentary term away from unemployment (say 5 years) or a lifetime (if they happen to occupy a safe seat).
Surely those who govern us don’t have one rule for them and another for us? I’ll have to dig out my old copy of Animal Farm to remind myself that equality means one thing for the governors and another for the governed.
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