Newsflash: Termination payments

minimum wage - purse with penny coinThe Government has published consultation, available here, on simplifying the tax and NICs treatment of termination payments. This means that the current £30,000 tax exemption may be subject to change.

The Government proposes removing distinctions between types of payment (contractual and non-contractual), replacing the current £30,000 allowance with an exemption for redundancy (voluntary or compulsory) at a rate rising in line with length of service over two years. There would also be new exemptions for wrongful dismissal, unfair dismissal or discrimination and the retention of existing illness, disability and armed forces exemptions.

Comments are invited by 16 October 2015. The Government plans to publish a summary of responses and any decisions as part of the 2015 Autumn Statement.