HM Revenue & Customs has published draft legislation changing the taxation of termination payments.
At present, this in intended to come into force in April 2018.
It would appear the main changes are likely to be:-
- To make all PILONs (payments in lieu of notice) taxable, even if they are non-contractual
- To require payment of employer NICs (national insurance contributions) on sums over £30,000 (not currently payable)
- Ensuring payments for injury to feelings are subject to tax (there is currently a conflict of judicial authorities on this point)
The exact wording of the draft legislation is open for consultation until 5 October 2016.
Farleys employment team are experts in advising on settlement agreements and termination packages.
We are also specialists in advising employees in both the private and public sector, across all types of businesses and all levels of seniority including regulated professionals and sports professionals.
We can advise you on the terms of the settlement agreements; the offer itself; the ability to negotiate a higher sum, enhanced terms and the alternatives to entering into the settlement agreement.
If you require any advice on a termination packages or settlement agreements, please contact our specialist employment team on 0845 287 0939, alternatively please complete an online enquiry form.