Employment Lawyer of the Year 2019 – East Midlands
We're pleased to announce that we are the winners of SME News's Midlands Enterprise Awards in the category of "Employment Lawyer of the Year 2019".
Timing of payments under a settlement agreement
It is that time of year when senior executives and employees receiving a large termination payment need to give consideration to the timing of the termination payment. Given the changes happening in the new tax year to the treatment of notice this is a carefully balanced exercise. Often for terminations in Jan/Feb/March it may be beneficial for the negotiated package to be deferred to the new tax year to avoid an employee being tipped into the next tax band or where the employee intends to take some time out or start their new business. It can be possible to negotiate...
Changes to termination payments
On 6th April 2018 the publicised changes to the treatment of notice under settlement agreements come into force. At present the tax treatment of a payment in lieu of notice depends on whether the contract has the right to pay in lieu of notice in which case notice must be taxed. If there is no such clause in your contract of employment but notice is always paid as a custom and practice then this should also be subject to tax. If not then the notice can come within the £30,000 tax free threshold. With effect from 6th April 2018 all...
Cap on public sector exit packages comes into force
The Government has just announced that after 1st February 2017 those in public sector positions will have a cap imposed on their exit packages of £95,000. This includes exit packages under a settlement agreement. On 24th January 2017 the Government passed a statutory instrument which will bring the cap on public sector exit payments into force on 1st February 2017. The cap is set at £95,000. This provision was originally proposed under s41 of the Enterprise Act 2016 but required a statutory instrument to be passed to bring it into effect. The £95,000 sounds like a lot of money but...
Changes to tax treatment of termination payments
The Autumn statement and 2016 budget announced some changes to the tax treatment of the termination payments. The current threshold of £30,000 will be retained but employer NI contributions will be payable on payments above £30,000 from April 2018 The Government are also looking at taxing an employee's basic salary if notice is not worked i.e. notice payments will be taxed when paid as a PILON irrespective of any contractual term. This is likely to be detrimental to employees as they will lose money they would have otherwise retained but also to employers who will need to pay tax and...