Change to tax treatment of payments made in lieu of notice introduced

Implementation date: 6 April 2018

The Finance (No.2) Act 2017 introduces a number of changes regarding the tax treatment of termination payments. All payments made in lieu of notice, whether contractual or not, will be subject to tax and Class 1 national insurance contributions. Other changes include clarifying that the exemption for injury does not apply to termination payments relating to injury to feelings and removing the exemption in relation to foreign service relief.