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New draft legislation has been tabled by HM Revenue & Customs with the hope of achieving a “simplification of the tax and National Insurance treatment of termination payments”. The Government have said that the current legislation regarding termination payments is “complex and can encourage manipulation by employers to take advantage of the employer NICs exemption.”

The legislation is not due to come into force until April 2018, but it is important people understand what changes will be made and what impact it could have upon them.

The most significant changes to be made are:

The wording of the legislation is open for consultation until 5th October. However, should you need advice regarding a Settlement Agreement, enquire with one of our employment lawyers today. Whether you’re an employer or an employee, call us on 0800 8321 554 or email to arrange a free consultation.