Notice Periods in Finance: Negotiating Your Exit

Notice is the part of changing jobs that most finance professionals think about last and that most often causes difficulty. It is the reason offers lapse, the reason start dates slip by a quarter, and occasionally the reason a move falls through entirely. At Financial Controller level three months is normal, Finance Directors often have three to six, and a new employer who needs someone in six weeks will move on. This guide covers what notice periods look like by level, the statutory minimums, what garden leave, pay in lieu of notice and restrictive covenants actually mean, how to negotiate an early release, how to handle a counter-offer, and how to hand over in a way that protects the relationship you are leaving.

This is general guidance rather than legal advice. Your contract governs your position, and where something is genuinely contested it is worth taking proper advice — Acas is a good free starting point and GOV.UK sets out the statutory minimums. For the wider sequence of negotiating, accepting and resigning, see our guide to finance job offer negotiation and resignation; this page goes deeper on the notice period itself.

What is typical by level

Two things worth knowing. The statutory minimum is far shorter than contractual notice — but your contract almost certainly says more, and the contract governs. And notice is mutual: the period that binds you usually binds your employer too, which is worth remembering when weighing security against flexibility. A longer notice period protects you if the employer ends the contract; a shorter one has option value if you want to move again.

The statutory minimums

The law sets a floor that applies where the contract gives less or says nothing. The scale is different depending on who is giving notice:

• Employee resigning: at least one week’s notice once you have been employed for more than a month. This does not increase with length of service.
• Employer ending the employment: at least one week if you have been employed between one month and two years; one week for each complete year between two and twelve years; and twelve weeks once you have been employed for twelve years or more. GOV.UK sets out this scale.

Contracts can give more but not less, and in practice almost every qualified finance contract gives considerably more, so the statutory scale matters mainly where a contract is silent. Your notice usually runs from the day after you hand it in, and if the contract requires notice in writing, verbal notice may not count — so put it in writing either way. Our guide to writing a resignation letter includes a template.

Garden leave and what it means

Garden leave is where an employer requires you to serve notice away from the business — still employed, still paid, not working. It is common at Financial Controller level and above, particularly where you are moving to a competitor or where you hold commercially sensitive information. An employer generally needs a garden leave clause in your contract, or your agreement, to require it.

For you it means full pay and contractual benefits for the period, no work obligations, and continued employment — which means the duty of good faith still applies and you cannot start elsewhere. GOV.UK confirms you keep the same pay and contractual benefits. For an employer it means keeping you out of the market while the covenants run.

The practical implication is worth understanding: garden leave frequently makes an earlier start possible rather than harder, because a business that has already removed you from operations has less reason to hold you to the full period. It is one of the better circumstances in which to ask.

Payment in lieu of notice (PILON)

The alternative to garden leave is for the employer to end your employment straight away and pay you for the notice period instead. This is payment in lieu of notice, usually shortened to PILON. Where your contract contains a PILON clause, the employer can use it; where it does not, you can only be paid in lieu if you agree, and otherwise you are entitled to work out your notice.

A few points finance professionals tend to ask about. PILON normally covers basic pay for the notice period, and may include contractual extras such as pension contributions or private medical cover if the contract says so. It is generally taxed through payroll as earnings, with tax and National Insurance deducted, rather than benefiting from the tax-free allowance that applies to some termination payments. Bonus treatment depends heavily on the scheme rules, so check whether being paid in lieu affects your eligibility for an in-year bonus. Untaken holiday is a separate entitlement — see GOV.UK on holiday entitlement.

For a candidate with a new role lined up, PILON is usually welcome: it frees you to start early. Before agreeing, confirm in writing the leaving date, the amount and what happens to any restrictive covenants, which normally run from the date employment ends.

Restrictive covenants

Most senior finance contracts contain post-termination restrictions, typically three kinds: non-compete (not working for a defined competitor), non-solicitation (not approaching clients or customers, sometimes extended to non-dealing), and non-poaching (not recruiting former colleagues).

Three practical points. They must be reasonable to be enforceable — in scope, geography and duration — and courts assess that against the legitimate business interest being protected rather than the employer’s preference. A twelve-month UK-wide non-compete on a Management Accountant is unlikely to survive scrutiny; a six-month restriction on an FD moving to a direct competitor may well. Garden leave usually offsets — well-drafted covenants set off time spent on garden leave against the restricted period, and where the contract is silent it is worth asking. And enforcement is a commercial decision: employers weigh cost and appetite, and most do not litigate. That is an observation rather than advice, and anyone facing a genuinely restrictive covenant on a move that matters should take proper legal advice rather than rely on general expectation.

The time to read all this is before you accept a new role, not after you resign.

Possible reform

Non-compete clauses are under review. The Department for Business and Trade published a working paper on options for reforming non-compete clauses, and the government has since said it will legislate to restrict them, and that it will look at other restrictive practices, starting with long notice periods and garden leave. At the time of writing no legislation has been published and no specific limit has been confirmed, so the existing rules still apply: a covenant is enforceable only if it goes no further than is reasonably necessary to protect a legitimate business interest. If you are negotiating a new contract, it is sensible to keep an eye on developments, but not to assume a restriction will fall away.

Negotiating early release

Most notice periods are negotiable in practice, and the request succeeds or fails on how it is framed.

Make the business case, not the personal one. “I would like to leave four weeks early” invites a no. “The close is complete on the 8th, the audit file is handed over, and I have documented the reconciliation process — would you consider releasing me from the 15th?” is a proposal your employer can evaluate.

Offer something. Completing a specific piece of work, training your replacement, remaining available for questions for a period afterwards. Employers release people early far more readily when the handover is genuinely covered.

Time the ask. Immediately after resigning is the worst moment — emotions are fresh and nothing has been handed over. Two to four weeks in, with the handover visibly progressing, is far better.

Understand what they are protecting. Continuity of the close, the audit, a system implementation, or simply not being short-staffed at year-end. If you can remove the specific concern, the period usually shortens.

And be prepared to serve it all. Some employers will not release, particularly in regulated firms or where you hold a named responsibility. That is their right, and pushing hard against a firm no damages a reference you may want for years.

The most common avoidable mistakes are not mentioning a long notice period until the offer, and asking for early release the afternoon you resign, receiving a firm no and then being unable to walk it back. Tell the new employer the truth at first interview, and ask your current employer two or three weeks in, with the handover visibly under way and a specific proposal attached. Employers release people who make it easy to say yes.

Managing the new employer

The other half of the problem, and the one people handle worst. Be honest about the notice period at first interview. Concealing a six-month notice until offer stage wastes everyone’s time and starts the relationship badly.

Give a realistic date rather than an optimistic one. A start date you miss is worse than a later date you meet. Agree a start date that reflects the notice you actually owe, not an early release you have not yet secured.

Keep them warm through a long notice. Six months is a long time to be forgotten, and businesses do occasionally reshape roles in the interim. Periodic contact — and, where offered, meeting the team before you start — protects the appointment.

And expect a counter-offer. They are common at this level and frequently generous. The moves that stick are made for scope and trajectory rather than money, which is why our guide to counter-offers is worth reading before you resign rather than after.

Counter-offers during notice

A counter-offer usually arrives in the first few days of notice: more money, sometimes a new title or a promised promotion. The question to ask is whether it fixes the reason you started looking. If that reason was pay alone, it might. If it was progression, scope, culture or management quality, a pay rise rarely solves it, and people who accept a counter-offer often move on within a year or two anyway.

If you have decided to go, decline graciously and keep it short: thank them for what the offer says about how they value your work, and confirm your decision stands. Tell your new employer or recruiter that a counter-offer was made and declined; it reassures them.

Handing over well

The most under-valued part of the process, and the one that pays back longest. Three things.

Document what is in your head. The reconciliation quirks, the accrual bases, the reason a particular account behaves oddly, the supplier who always disputes. Whoever follows you will discover all of it eventually; leaving a note is the difference between being remembered well and being remembered in February.

Brief your successor or your manager properly, in writing as well as verbally. Our handover guide covers what a good one contains — it applies equally to a permanent departure. Where you manage external relationships — the bank, the auditors, an investor, key suppliers — introducing your successor during notice is good practice.

And leave the relationship intact. Finance in any given city is a smaller world than it looks, and the FD you leave this year may be the one hiring you in five. Serving notice gracefully — even where you are leaving because something was wrong — is a genuinely worthwhile investment.

The mechanics of resigning are covered in our guides to writing a resignation letter and negotiating, accepting and resigning. If you are still deciding whether to move at all, see when to change finance jobs.

Notice periods from the employer’s side

For a hiring manager, notice is a planning variable, not a surprise. If you are recruiting a Financial Controller who is on three months’ notice, a permanent search that produces a shortlist within one to two weeks and an offer a few weeks later still means the new FC is unlikely to start for four months or so from the day the search begins. Build that into the timetable for the audit, the budget or a system change.

When one of your own finance team resigns, the same arithmetic runs in reverse. Decide early whether you will hold them to the full period, release them, put them on garden leave or pay in lieu, and whether the handover justifies the cost. Where the gap is long or the timing is bad — a resignation in the middle of year-end, for example — an interim can bridge it. Our interim Financial Controller recruitment service can usually introduce candidates within days, and our interim accountancy recruitment covers Finance Managers, management accountants and other roles.

Two further points for employers. Review the notice and covenant terms you offer: a six-month notice on a Finance Manager role can deter good candidates, and over-long covenants may not be enforceable anyway. And when making an offer, ask candidates about their notice and any restrictive covenants at the start of the process, not at offer stage. Our Financial Controller recruitment and Finance Manager recruitment teams factor notice into every search plan.

Notice Periods in Finance: FAQs

How much notice do I have to give?

Whatever your contract says — commonly one to three months at qualified level, usually three months for a Financial Controller and often three to six months for a Finance Director. If the contract is silent, the statutory minimum is one week once you have worked for more than a month.

Can my employer put me on garden leave?

Generally only if your contract allows it or you agree. You stay employed and paid during garden leave and cannot start your new job until your notice ends, unless your employer agrees to release you.

Can I leave before my notice period ends?

Only by agreement. Leaving without serving the notice you owe is a breach of contract, and while employers rarely sue, it can cost you your reference and, in some cases, money. Negotiate an early release instead.

Is payment in lieu of notice taxed?

Yes, PILON is normally taxed as earnings through payroll, with tax and National Insurance deducted. Check your contract and the scheme rules for how pension contributions and bonus are treated.

Should I accept a counter-offer?

Only if it fixes the reason you started looking. If that was progression, culture or scope rather than pay, a counter-offer rarely solves it.