I was made redundant in 2025. It was unexpected and fraught with error, causing a huge amount of distress and damage.
Almost a year later, when I did some research as to why I did not receive any tax back, I reviewed my redundancy package and the associated SCSB (Standard Capital Superannuation Benefit) calculations and uncovered a series of avoidable process gaps.
Collectively, they resulted in incorrect tax treatment, confusion and extensive follow-up. Five weeks later, I am still back and forth, seeking clarity and uncovering error after error.
I wouldn’t have known anything if I hadn’t contacted Revenue, which discovered it was incorrect.
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These failures led to an understated SCSB allowance, excess tax deducted, and significant avoidable effort to correct matters with payroll, pension administrators and Revenue. Revenue has directed corrections, which are now being actioned.
Is it reasonable for me to seek compensation for the failures, distress and time expended? Can I recover professional costs incurred from seeking tax and pension advice?
Also, what are my rights in relation to the reimbursement of all tax over-deducted, with interest where applicable?
I’d appreciate guidance on whether compensation after the fact is reasonable based on the consistent level of inefficiencies uncovered once I had the mindset to review and question what was done.
Although the employer’s handling of the reader’s redundancy package appears to be “poor practice”, there is nothing within employment legislation that provides compensation for such, according to workplace experts.
Alongside incorrect tax treatment for a redundancy package, legislation does not provide for compensation for the inconvenience and frustration caused as a result, according to Patrick Scanlon, a HR business consultant at HR Buddy.
However, Scanlon says there may be an argument for breach of contract as the employer failed to apply tax exemptions that the reader is legally entitled to following confirmation of a redundancy.
“It is, however, worth having a conversation with a solicitor before embarking on this journey,” he says.
In more “practical terms”, Scanlon advises contacting the former employer to request reimbursement for the cost of professional advice, making clear that it was obtained as a consequence of their failure to apply the correct tax treatment.
However, the former employer is not obliged to pay any of these costs, he says.
They also may be hesitant to do so, according to Scanlon, as they may believe covering the costs could be “interpreted as an admission of wrongdoing on their part”, adding that they may fear a “legal challenge” from the reader.
Separately, Scanlon says the reader is entitled to a full refund of all overpaid tax once the error is corrected through Revenue, though there will be no entitlement to “interest”.
Based on the reader’s account, the handling of their redundancy package “sounds like a mess”, says Michelle Halloran, independent HR consultant and workplace investigator, of Halloran HR Resolutions.
“It’s poor practice that the employer didn’t process that correctly. If it’s a large employer, there’s no excuse for them. But if it’s a very small business, it’s quite possible they didn’t know what they were doing,” she says.
However, in terms of seeking compensation for the failures, distress and time spent on trying to rectify the situation, Halloran believes it “may not be worth their while”, given that the errors are being corrected, and noting the time and expense associated with such action.
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