Termination payments (policy factsheet)

  • July 2020

For many, the tax-exempt figure of £30,000 immediately comes to mind when taking into consideration the tax treatment of a payment in relation to the termination of employment. As we know, this is no longer the case, as it cannot be assumed that the £30,000 exempt threshold automatically applies.

In 2018, HMRC introduced changes that would affect the treatment of tax and National Insurance Contributions (NIC) on all termination payments made to an employee. Also coming into effect from 6 April 2020, was employers’ Class 1A NICs on any termination payment made over the £30,000.

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July 2020