HMRC specifically target termination payments for review as most employers do not consider the tax & NIC implications surrounding redundancy payments. There is a popular misconception that the first £30,000 of any termination payment is automatically tax & NIC free. There are many reasons why an employee leaves a business, including redundancy, health issues, early retirement etc. each with its own tax & NIC implications. Issues also commonly arise on Restrictive Covenants, and ‘terminal bonuses’, which may be agreed as part of a Settlement Agreement reached where an employee leaves or is being dismissed.
emTax consultants have assisted employers on getting HMRC to agree that certain payments relating to long term sickness or to a job change are either completely non-taxable or can take advantage of the first £30,000 being tax free. We can review or draft your redundancy policies to maximise tax efficiencies and obtain clearance from HMRC on the tax position before any payments are made. Our approach results in considerable savings to both the employer and any affected employees.
Interested in this service?
Get in touchMake an Enquiry