Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what plans his Department has to introduce a tax and National Insurance holiday for people receiving the notice period of pay after being made redundant.

Payments made in lieu of notice are treated as taxable earnings. All employees will pay income tax and Class 1 NICs on the amount of basic pay that they would have received if they had worked their notice in full.

Termination payments such as redundancy payments are subject to a £30,000 income tax exemption. Individuals do not pay National Insurance contributions on termination payments, even if the value exceeds £30,000. This is one of the most generous regimes in the world and means that the majority of individuals receiving termination payments will pay no tax at all.