Employer’s NIC and termination payments changes

Jun 17, 2019

The government has confirmed that Class 1A employer’s national insurance contributions (NIC) which will be due on cash termination awards of more than £30,000 from 6 April 2020 will be payable during the relevant tax year. Employer’s NIC on non-cash elements of termination packages over £30,000, will be payable after the tax year-end.

This was confirmed by the Exchequer Secretary to the Treasury and HM Treasury/HMRC in their evidence to the Public Bill Committee’s scrutiny of the NIC (Termination Awards and Sporting Testimonials) Bill 2017-19, which is currently progressing through Parliament.

The Bill introduces a new Class 1A NIC charge on termination awards in excess of £30,000 and a new Class 1A NIC on sporting testimonial payments over £100,000..