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Taxation of termination payments: recent developments

Taxation of termination payments: recent developments

Donna Sharp and Mike Lavan take a look at some of the recent changes being made to the taxation of termination payments.


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Recent changes to the taxation of termination payments have been driven by the Government’s desire to provide certainty for employees and employers on the tax and NIC treatment of termination payments, to simplify the current rules, and to ensure that rules are fair and not open to “abuse or manipulation” – while of course, ensuring that the Exchequer does not lose out. This has resulted in changes being made to non-contractual pay in lieu of notice (PILON); Employer’s NIC on payments above the £30,000 threshold; the exception for payments made in case of death, injury or disability; and Foreign Service Relief. In a recent article for Executive Compensation Briefing, Donna Sharp, a director in KPMG’s Employment Legal Services team and Mike Lavan, a director and employment tax specialist in KPMG’s Employer Reward Services team, take a look at the detail of the changes.

To read the article click here.

For further information please contact:

Donna Sharp

Mike Lavan

Employment Law

Employment Law

Employment Law

Providing you with advice on typical problem areas, and analysis on significant developments in employment law.


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