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HMRC internal manual

Employment Income Manual

Termination payments and benefits: redundancy: re- engagements: interaction of tax and employment law

An employee who is dismissed is entitled in specified circumstances to a statutory redundancy payment under the Employment Rights Act 1996 or Northern Ireland equivalent (see EIM13760).

However, where an employee is re-engaged within a certain time, the termination is not treated as a dismissal for this purpose.

Consequently, the right to a statutory redundancy payment may be lost.

But this does not affect the taxation position for any non-statutory redundancy payment.

Where a person is re-engaged, the questions to consider remain as in EIM13810.