The effective date for the income tax and NIC changes to termination payments and sporting testimonials has been put back further and will now take effect from April 2020. Employer Class 1A NIC will be then become payable on termination payments above £30,000 and on sporting testimonials of more than a £100,000 lifetime exemption.
HMRC included this information in a recent amendment to its guidance on the income tax and NIC treatment of termination payments.
This also applies to sporting testimonials, although HMRC’s guidance on the income tax and NIC changes has not yet been updated.
The draft legislation for the reforms to the NIC treatment of termination payments and income from sporting testimonials was set out in the draft NIC Bill published on 5 December 2016 and is intended to ensure that the NIC treatment of termination payments and sporting testimonials is consistent with the income tax rules legislated in recent Finance Acts.