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Having been involved in the consultation forums surrounding how to tackle the “fat cat” pay offs it comes as no surprise something is changing to deter employers from paying substantial amounts of money in termination payments.
There was debate around whether or not to reduce the £30k limit and make it subject to Income Tax and National Insurance Contributions, but so much was said around the individuals who don’t have any choice in the matter if their employer chooses to terminate the contract.
So to the positives for this move; the individual will see no change and not pay Income Tax up to £30,000 and no National Insurance Contributions on any payments
From April 2018, the employer and therefore the business will have to pay employers’ National Insurance on any termination payments made that are above £30,000.
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