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HMRC internal manual

Employment Income Manual

Tax treatment of Post Office employees: sub- postmasters: payments on termination of office

Where a sub-postmaster ceases to hold that office, any terminal payments received must be considered under the rules applicable to employees even if the remuneration of the office may, in practice, have been included with trade receipts in accordance with EIM68205.

The main types of terminal payments and their tax treatment are as follows:

  • surplus payments: where a cash surplus is revealed by the audit carried out on termination, it is paid over to the sub-postmaster by the Post Office, see EIM68225
  • closure payments: these are payments made on the closure of the sub-post office, see EIM68228.