CIPP survey: Simplifying tax and NICs treatment of termination payments

06 September 2016

The CIPP Policy team has created a short survey on the draft legislation which makes changes to the taxation of termination payments. Please help inform our response by completing the survey; it should only take 10 minutes of your time.

In July 2015, the government published a consultation on the tax and National Insurance contributions (NICs) treatment of termination payments to which the CIPP responded on behalf of its members.

The government has several objectives for the tax and NICs rules on termination payments: the tax system should continue to provide support to those who lose their job; the rules should provide certainty for employees and employers; the rules should be simple; the complexity that the Office of Tax Simplification (OTS) highlighted in their report should be taken into consideration; and the rules should be fair and not open to abuse or manipulation.

The rules governing the taxation of termination payments are complex and can encourage manipulation by employers to take advantage of the employer NICs exemption. This is because employers can, in some circumstances, change the nature of some payments so that they become termination payments, including remuneration such as bonuses which would normally be subject to tax and NICs.

To meet these objectives, the government announced at Budget 2016 that it would make changes to the taxation of termination payments.

The draft legislation to support these changes has been published and the government is now consulting on the technical aspects of that legislation.

Based on the consultation document, the CIPP Policy team has created a short survey which closes on 26 September and should take around 10 minutes to complete. Thank you.


We would be grateful if you could spare the time to complete our survey, but you may find it helpful to read the draft legislation first which can be found at Annex A of the consultation document.