Termination payments – changes to NICs from 6 April 2020

摘要

From 6 April 2020, termination payments in excess of £30,000 will become liableto Class 1A NICs at 13.8% and employers will have in-year reporting andpayment responsibilities.To set the context, the current position is that there is a difference in treatmentbetween income tax (PAYE) and NICs on termination payments, which thegovernment is looking to at least partially correct.Assuming the payment in question is a compensatory figure (as opposed to acontractual entitlement) and that it is not already caught under the ‘postemployment notice pay’ provisions introduced in April 2018, it will be tax-free upto £30,000 and thereafter subject to PAYE.