Employer National Insurance contributions on termination payments will now take effect from April 2020Print publication
In Autumn 2018 budget news, there is to be a further delay before termination payments in excess of £30,000 will be made subject to employer national insurance contributions (NICs).
There have been a number of recent changes to the tax and NI treatment of termination payments (especially payments in lieu of notice). One of the changes proposed by the Government was that termination payments which qualified for the £30,000 tax exemption would be subject to employer NICs on amounts in excess of £30,000.
At first, this change was expected to be introduced from April 2018. The Government then announced in the Autumn 2017 Budget that it would take effect from April 2019. In the 2018 Budget, the Government stated that this change will be further delayed to now take effect for termination payments made on or after 6 April 2020.
Note that the existing employee NICs exemption will be retained where the termination payment exceeds £30,000.
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