The first GBP 30,000 of a termination payment which compensates the employee for loss of office, can be exempt from tax and NIC (ITEPA 2003, s 403(1)). Tax and Class 1A (employer-only) NIC liability will arise to the extent such payments exceed the GBP 30,000 threshold. However, unlike Class 1A NICs liabilities that arise on benefits-in-kind, Class 1A liabilities on termination payments must be accounted for through RTI
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