Are you correctly taxing termination payments to employees for disability?
Termination payments made to employees on account of disability are completely free of tax and National Insurance contributions (NICs). They are not subject to the £30,000 cap that normally applies to tax-free termination payments.
HMRC's restrictive interpretation of what qualifies as a disability payment has been successfully challenged in a recent case.
Download PDF for more information
© Stephenson Harwood LLP 2023. Information contained on this page is current as at the date of first publication and is for general information only. It is not intended to provide legal advice.