Simplification of the tax and National Insurance treatment of termination payments - consultation on draft legislation
We are analysing your feedback
Visit this page again soon to download the outcome to this public feedback.
This consultation ran from
A consultation on draft legislation, in response to the summer 2015 consultation on termination payments.
Simplification of the tax and National Insurance treatment of termination payments: government response and consultation on draft legislation
PDF, 364KB, 34 pages
This file may not be suitable for users of assistive technology. Request an accessible format.
If you use assistive technology (such as a screen reader) and need a version of this document in a more accessible format, please email email@example.com. Please tell us what format you need. It will help us if you say what assistive technology you use.
The government has analysed the responses to its consultation on termination payments held in summer 2015 and has set out its response.
At Budget 2016, the government announced that it would make changes to the taxation of termination payments.
The changes include:
- clarifying the scope of the exemption for termination payments to prevent manipulation, by making the tax and National Insurance contributions (NICs) consequences of all post-employment payments consistent
- aligning the rules for income tax and employer NICs so that employer NICs will be payable on payments above £30,000 (which are currently only subject to income tax)
- removing foreign service relief
- clarifying that the exemption for injury does not apply in cases of injured feelings
The policy underpinning the changes is now explained in greater depth.
The draft legislation is intended to give effect to the changes, and the government invites views on whether this objective is achieved.
Published: 10 August 2016
From: HM Revenue & Customs