Changes to taxation of termination payments

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Walker Morris risk series stampAs from 6 April 2018, all non-contractual payments paid in lieu of the employee working out their notice will be subject to income tax and NIC. This will apply even if there is no payment in lieu of notice clause in the employment contract so, if an employee is not required to work their full notice for whatever reason, HMRC will always treat it earnings subject to tax and NIC.

If you would like further advice on this topic please contact David Smedley or Andrew Rayment.