Paying tax on ex gratia payments

[cc1965]

I've been doing two jobs for the past 12 months and my boss has negotiated an 'ex gratia' payment for me with HR (otherwise known as an 'honoraria' - is there a difference?)
Will I have to pay tax, NI and a pension contribution on this payment which is considered a thankyou gift from the company for my extra work?
And if they do tax me on it...can I appeal?

[Ethel]

It is income - you pay tax and all the rest of it.

The taxman isn't bothered whether it's ex gratia or honoraria - this is only a way of employees performing jobs outside of their normal contract.

[factor-fiction]

Yes, as Ethel says it is taxable. It will also be subject to NI. As to whether it's pensionable will depend on your employer.

[buildersmate]

As above. Howevere there is a limit on employee's NI contributions per month (or week) provided you are not a Director, so you will probably gain in the sense that once the max. amount is reached, your deduction for NI on that payment will be capped.
If your company runs a Final Salary Scheme pension scheme, there is no advantage to you in this payment being pensionable - it won't change the salary on which your pension is based, so query this if it happens. On a Money Purchase pension scheme, the pension contribution just rolls extra funds into your own pension pot.
No you can't appeal it - it's just income.

[factor-fiction]

Although the NI figure falls I thought NI was now payable above the old cap, albeit only at 1%. Any saving in NI rate reduction will be outweighed by the move to 40% tax at a similar salary level

[buildersmate]

You're probably right Factor (about the 1%). I didn't check the latest stuff on it.