The government is considering how they can make the tax and National Insurance contributions (NICs) treatment of termination payments simpler and fairer and wants to hear your views on how that can be achieved.

The consultation particularly seeks views on:

  • removing the distinction between contractual and non-contractual termination payments and whether this will make it easier for employers and employees to understand
  • the design of the new exemption from income tax and NICs
  • whether the income tax and National Insurance treatment of termination payments should be aligned
  • which of the existing exemptions which remove the liability to income tax should be retained and whether any new exemptions should be introduced

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