Policy paper

Income Tax and National Insurance contributions: treatment of termination payments

This tax information and impact note aligns the rules for tax and employer National Insurance contributions by making employer NICs payable on termination payments above £30,000.

Documents

Details

The measure aligns the rules for tax and employer National Insurance contributions (NICs) by making employer NICs payable on termination payments above £30,000.

Update

On 2 November 2017 the government announced that the introduction of the National Insurance Contributions Bill will be delayed.

The introduction of employer NICs on termination payments above £30,000 will now take effect from 6 April 2020 rather than 6 April 2018.

Published 5 December 2016
Last updated 30 November 2018 + show all updates
  1. Date changed for when Class 1A NIC employer charges on termination payments of more than £30,000 and on sporting testimonials of more than the £100,000 lifetime exemption are due to come into effect.
  2. The 'Proposed revisions' section has been updated about statutory redundancy payments.
  3. Updated to mention the introduction of employer NICs on termination payments above £30,000 will now take effect from 6 April 2019.
  4. First published.