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HMRC internal manual

PAYE Manual

PAYE operation: lump sum termination payments: introduction

Individuals may receive lump sum termination payments from their employer when theiremployment ends.

Special tax rules apply to these payments. They are covered in detail in the EmploymentIncome (EIM) Manual at EIM 12800 - 13995, which tells you what is assessable and whatrelief may be due.

This section deals with the procedures to be followed by employers and HMRC Offices withregard to the operation of PAYE on such payments.