Government launches consultation on simplification of tax treatment of termination payments

One of the most contentious areas in the field of employment law concerns the tax treatment of settlement payments on the termination of employment. In the 20 years plus that I have been dealing with employment law matters the law in this area has never been entirely settled and there has been a long series…

termination payments: a trap for employers

A Ms. O’Farrell worked for Publicis Consultants UK Ltd. Her contract provided for three months’ notice.  She was made redundant in May 2009 and was provided with statutory redundancy pay and holiday pay. Her dismissal letter also said that she would receive an ex-gratia payment equivalent to three months’ salary (£20,625) free of Tax and NI…

Compromise agreements

For many years it has been the practice of the Inland Revenue, now HMRC, to publish “extra-statutory concessions”. These effectively correct errors in and omissions from legislation which would result in tax being collected where it would be inappropriate. The practice has always been of questionable legitimacy. For HMRC to have discretion, even via published…