Finance (No. 2) Act 2017 enacted changes to the taxation of termination payments, which will apply where an employment terminates on or after 6 April 2018. Further changes will be made by the Finance Bill 2018 and by a new NICs Bill to be published later this year. Most significantly, the amounts of a termination award which are equal to the basic pay an employee would have received if he or she had worked the full notice period will be treated as income from the employment. There are also changes to payments for ‘injury’, to the foreign service exemption, and to the NICs treatment of termination payments.
