Termination payments under review

News: September 2015

Termination payments under review

A further consultation taking place this summer is into the simplification of the tax and national insurance treatment of termination payments.

There is a widespread but mistaken belief amongst employees and employers that the first £30,000 of any pay-off is not subject to income tax and NICs. This often leads to difficulties when employees discover that the exemption does not apply to their circumstances and that income tax and NICs are due on the full amount.

Please contact us before you make any workers redundant as it is still possible to structure termination payments in a tax-efficient way if you get the documentation correct.