Commentary

A6.968 Termination packages

Administration and compliance

A6.968 Termination packages

A6.968 Termination packages

This is often an extremely complex subject. Most employers are familiar with the £30,000 tax exemption1, but it is not always due, and it is important to consider the make-up of the termination package. HMRC will examine each element of the package to decide whether it should be liable to tax and National Insurance, and will only give the exemption to those elements that it is satisfied are either not taxable or are liable to National Insurance in some other way, for example as earnings2.

HMRC will often consider the payments made in respect of the following as

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