Tag: termination

The government is to look at simplifying deductions from termination payments in response to a recent consultation. Last year, the Office of Tax Simplification concluded that the current tax system for termination payments was complex, unfair and increased the likelihood of tax avoidance. Errors or disagreements with HMRC occur easily and mistakes are expensive. Currently non-contractual termination payments (such as for redundancy) are not liable for NICs and are tax free below £30,000, but contractual ones are fully subject to income tax and NICs.

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