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HMRC internal manual

PAYE Manual

PAYE operation: lump sum termination payments: payment made into court following arbitration

In this context, `Court’ is to be taken to cover a stakeholder or solicitors acting onbehalf of an employer or employee.

An employer may make payment(s) into Court if a former employee or office holder takes acompensation claim there for arbitration. The Court will then make any appropriatetermination payment to the individual.

When the Court makes payment

  • Ensure the individual is brought within SA, if an SA record does not already exist
  • Write to the individual advising him or her that



  • Tax is due on the payment by the Court
  • He or she should include the payment in his or her self assessment for the year in which the payment was received
  • Credit for PAYE deductions (if PAYE was operated) may be claimed in the self assessment