A consultation into the draft legislation regarding changes to the future tax and National Insurance (NI) treatment of termination payments has now been published by HM Revenue & Customs (HMRC).
The changes have been amended considerably since they were first announced in the March 2016 Budget – and HMRC has now laid out the full scope of rules and exemptions for termination payments, with regards to the National Insurance contributions (NICs) consequences of post-employment payments.
The document also sets out plans to align the rules for income tax and employer NICs so that employer NICs will be payable on payments above £30,000 (which are currently only subject to income tax).
It also clarifies that the exemption for injury will no longer apply in cases of ‘injured feelings’, and that foreign service relief will be removed.
The full set of changes, which are expected to take effect in April 2018, are outlined in the following document: Simplification of the Tax and National Insurance Treatment of Termination Payments.
At Moore Thompson, we can offer support and advice on a wide range of tax and NI-related issues, including the complexities that impact termination payments. For more information about how we could help you, please contact us.