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Government reforms (3): Taxation of termination payments

What do we already know?

We’ve updated you previously that the law changed on 6 April 2018 so that all Payments In Lieu of Notice (PILON), whether contractual or non-contractual, are taxable and subject to Class 1 National Insurance Contributions (NICs). For updates see here.

What’s new?

The HMRC has revised its Employment Income Manual to reflect the new rules on PILONs from 6 April 2018.  The updated manual is available here.



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