Posted on:Employment, HMRC, Income Tax, NIC, On the Move – Tax Podcasts on U.K. Legal Issues, PILON, Straight to the Point, Termination Payments, U.K. Tax
Complicated new rules will shortly come into force governing the taxation of termination awards made to employees. Among other things, the new rules require employers:
- from 6 April 2018, to tax as earnings that part of an employee’s termination payment that is equal to the basic pay the employee would have received had he or she worked the full notice period (regardless of whether any part of the payment constitute a PILON); and
- from 6 April 2019, to pay employer’s National Insurance contributions on any part of a compensation payment that exceeds the £30,000 tax-free exemption.