ICAEW Tax Faculty has asked HMRC to issue guidance on the new termination payments tax and NIC regimes as soon as possible, see ICAEW Rep 16/18. Employers are having to consider and advisers are having to advise on terminations that are impacted by the new rules and it is not always clear how the rules apply.
Guidance with examples is needed on, inter alia:
We also recommend that, as the reporting processes and payment dates for termination payment employer-only NIC will be completely different from that for class 1A NIC on BiK and the NIC legislation has not yet been laid, the opportunity should be taken to call the new employer-only NIC charge something different from class 1A – say class 1C – to distinguish it from class 1A on BiK. A different class name would avoid confusing employers and would reduce mistakes.
ICAEW Tax Faculty members will be able to find out more about termination payments in an article in a forthcoming edition of the faculty’s monthly journal TAXline. If you are not a member, you can join using the same link.
We are pleased to report that HMRC responded quickly to our request, and if you have any suggestions as to what HMRC’s guidance should cover, please post a comment below or send a note to firstname.lastname@example.org.