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All change, please—proposed amendments to the tax and NICs treatment of termination payments

All change, please—proposed amendments to the tax and NICs treatment of termination payments
Published on: 01 September 2016
Published by: LexisPSL
  • All change, please—proposed amendments to the tax and NICs treatment of termination payments
  • What is the background to this consultation?
  • How does the draft legislation propose to treat payments in lieu of notice (PILONs) from April 2018?
  • How will the National Insurance Contribution (NICs) position of termination payments change from April 2018?
  • Does the attempt at dealing with the injury/injury to feelings distinction succeed?
  • Are there any other interesting aspects of the draft legislation?
  • Do you think the proposed legislation if enacted will have significant consequences for employers in terms of costs and exit strategies? Are there any negative implications for employees at all?

Article summary

Tax analysis: In response to its consultation on simplifying the tax and NICs treatment of termination payments, the government has published a consultation on draft legislation which will implement a simplified regime from April 2018. Sam Whitaker, counsel at Shearman & Sterling, profiles the proposed changes, and what they could mean for employers and employees. or take a trial to read the full analysis.

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