Tax

IR35: Government publishes draft legislation reforming private sector off-payroll working

On 11 July 2019 the government published draft legislation (Draft Legislation) together with a summary of responses (Response Paper) to the policy paper and consultation document issued in March 2019 regarding proposed changes to the off-payroll working rules, commonly referred to as the IR35 regime, which apply to the private sector. The private sector IR35 regime applies where an individual provides their services (directly or indirectly) through a personal service company (a PSC) to another person or entity (an End-User) in circumstances where, had the individual provided their services directly to the End-User rather than through their PSC, they would …

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UK Budget 2018: Employment

The Chancellor has delivered the 2018 UK Budget. Whilst the number of employment tax related announcements were limited there were some significant changes proposed, most notably in relation to off-payroll working arrangements in the private sector. Set out below is a summary of the key announcements.   Off-Payroll Working in the Private Sector As widely anticipated following its consultation earlier this year, the Government has announced that it will be reforming the off-payroll working rules (commonly known as “IR35”) in the private sector to increase compliance and bring them into line with changes made for public sector engagements in April …

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April 2018 tax reforms will impact on employers making termination payments

Employers who are planning to make termination payments to departing employees on or after 6 April 2018 need to be aware of important reforms which will take effect on 6 April 2018. The key point for employers to note is that the value of all notice periods not worked will become taxable and subject to both employer and employee National Insurance Contributions (NICs), regardless of whether there is a contractual payment in lieu of notice (PILON) clause, or not.  This is a critical change to the existing position, where currently the value of a notice period can generally be paid …

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Termination payments – changes to the tax treatment

Following its consultation in 2015, the Government has now confirmed the changes which will be made in how termination payments will be taxed, and published draft legislation for comment. The changes will apply “from April 2018”. It is not clear at this stage whether payments pursuant to settlement agreements entered into before that time will be grandfathered under the existing legislation, but that may well be the case. Key points are: the existing £30,000 income tax exemption for termination payments will continue to apply, as will the unlimited exemption for employee national insurance contributions (“NICs”) (provided, as now, the payment …

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