HMRC update policy note on income tax and NIC treatment of termination payments
Released 30 November 2018
HMRC have updated the policy note on treatment of termination payments to reflect the date change for when Class 1A charges will come into effect.
HMRC’s policy paper Income Tax and National Insurance contributions: treatment of termination payments explains the alignment of the rules for tax and employer National Insurance contributions (NICs) by making employer NICs payable on termination payments above £30,000. The policy note has been updated to reflect the date change for when Class 1A NIC employer charges on termination payments of more than £30,000 and on sporting testimonials of more than the £100,000 lifetime exemption are due to come into effect. On 2 November 2017, the Government announced that the introduction of the National Insurance Contributions Bill will be delayed. The introduction of employer NICs on termination payments above £30,000 is due to take effect from 6 April 2020 rather than 6 April 2018.