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HMRC internal manual

Employment Income Manual

Relevant termination awards: relevant termination awards subject to section 403 ITEPA 2003

With effect from 6 April 2018, some termination payments and benefits are chargeable to income tax as general earnings and do not benefit from the £30,000 threshold available in section 403 ITEPA 2003.

EIM13874 defines the term ‘relevant termination awards’ and explains that relevant termination awards are split into 2 elements:

  • post-employment notice pay (PENP) (see EIM13876)
  • relevant termination awards subject to section 403 ITEPA 2003

Termination awards subject to section 403 ITEPA 2003 are chargeable to tax as specific employment income and benefit from the £30,000 threshold (see EIM13505 onwards). These termination awards are calculated by subtracting the amount of PENP from the total amount of all relevant termination awards received.