Overview

Late last year, HMRC announced changes to the taxation regime of termination payments. Details of the changes have recently been published in Regulations. The changes will take effect from 6 April 2011.

Anyone negotiating exit payments must understand the new rules, their impact on employees and, ultimately, on settlement negotiations. The crux of the matter, from an employer’s perspective, is crystal clear: get it wrong and you will have to pay HMRC the outstanding balance of your employee’s tax liability (most likely with penalties and interest). It will then be up to you to chase up the employee.

Nabarro looks at the new provisions and what steps employers must take.

To read more click ‘view briefing’.