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Change to taxation of termination payments dropped

Change to taxation of termination payments dropped

Controversial changes to the taxation of termination payments have been dropped.

As we wrote about in our August newsletter, following a consultation the government had produced draft legislation on the taxation of termination payments, which would have had the effect of making all payments in lieu of notice (‘PILONs’) subject to tax and NICs and making all payments above £30,000 subject to employer NICs.

The Finance Bill 2017, which would have housed these changes, is being fast-tracked through the legislative process in light of the early general election and a result these changes have been left out.

Depending on the result of the election, we might see these changes reappear later in the year.