New Tax Rules For Termination Payments In UK

Law360 (April 13, 2018, 11:50 AM EDT) -- On April 6, 2018, there was an important change in the United Kingdom to the way termination payments are taxed. New rules aim to simplify the taxation of termination payments and mean that income tax and national insurance contributions, or NICs, must now be paid on all payments which relate to the notice period.

Termination payments can arise in a number of ways and can generally be described as severance payments made to employees on the termination of their employment — whether that be because of a dismissal or constructive dismissal.

On termination, employers need to ensure that tax and NICs...

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