Settlement Agreements: What to Check Before You Sign

A settlement agreement is only legally binding once you have taken independent legal advice, which your employer is required to pay a contribution towards – always ask for it. Check the payment breakdown line by line: notice pay, redundancy pay, and any ex-gratia sum are taxed differently, and it is common for the tax-free £30,000 exemption to be applied incorrectly. Read the restrictive covenants closely too, particularly anything limiting who you can work for afterwards.