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HMRC internal manual

Employment Income Manual

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

EIM68220 listed the main terminal payments made to sub-postmasters.

  • Closure payments: these payments are connected with the termination of the office of subpostmaster and so are chargeable only under Section 401 ITEPA 2003 (see EIM13000 and below). Examples are:
    • Payments made by the Post Office Discretionary Fund. Paid where the Post Office decides to close or relocate a branch
    • Payments under network rationalisation initiatives such as the Urban Network Reinvention Scheme from 2002

Note: if the aggregate of payments exceeds £30,000, the excess counts as employment income (see EIM00512) for the year of receipt (see EIM13505 and EIM13100). Where a sub-postmaster’s remuneration has been included with trading receipts chargeable as Trading Income (see EIM68205) the excess over £30,000 should not be included in the Case 1 computation.

For the treatment of surplus payments see EIM68225.