The following Employment Tax guidance note Produced by Tolley in association with Sue El Hachmi of Osborne Clarke LLP provides comprehensive and up to date tax information covering:
These are undertakings given by employees during employment or on termination which restrict their conduct or activities. Due to historic debate as to whether such payment fell within the general earnings of the relevant income tax acts, there is a specific charging provision which ensures that payments made in connection with current, future or past employments or offices are taxable as earnings.
ITEPA 2003, s 225 taxes payments made to an individual for entering into restrictive covenants. In order for consideration to be brought into charge by ITEPA 2003, s 225, the following conditions must be satisfied by the individual:
a restrictive undertaking is given in connection with a current, future or past office or employment
the undertaking must restrict conduct or activities. It may be absolute or qualified and need not be legally binding.
a payment is made in respect of the giving of the undertaking or its partial or t
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