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HMRC internal manual

Employment Income Manual

Termination payments and benefits: handling enquiries: Employer's Further Guide to PAYE and NICs (CWG2)

In addition to the situations explained in EIM12825, there are a few enquiries concerning proposed terminations to which we are committed to giving binding answers where CAP1 (see EIM12825) does not require it (if the enquirer so wishes). These enquiries should be dealt with in the same way as those requiring a formal binding answer (see EIM12825). They are all mentioned in CWG2 and concern:

  • the disability and injury compensation exception (see EIM13610).
  • the foreign service exception (see EIM13680) and reduction (see EIM13700)
  • payments by third parties. In this situation advice may be needed by the employer as to how the £30,000 threshold (see EIM13505) applies to payments made by the third party and by the employer
  • non-cash provisions (see EIM13250).

In these cases agree with the customer what the tax treatment of the payment or benefit is.

In all these cases, the timescale for your reply must be reasonable and you must be satisfied that all the information you need has been provided. If either of those requirements is not met, you should give as complete an answer as possible and explain that it cannot be binding in the circumstances.