Changes to tax treatment of termination payments introduced

Implementation date: 6 April 2019

The Finance Bill introduces a number of measures in relation to the tax treatment of termination payments. Employers will be liable to pay national insurance contributions (NICs) on termination payments above £30,000 that are already subject to income tax. Other changes include making all payments in lieu of notice taxable and subject to Class 1 NICs (removing the distinction between contractual and non-contractual notice payments) and removing the exemptions in relation to foreign service relief and injury or disability payments.