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On 6 April 2011, HMRC changed the tax code that applies to payments made to an employee after he leaves the employer, and which have not been included in the form P45.
The tax code to be operated against cash-based payments changed from the BR tax code to 0T.
However, share-based payments – for example, securities, interests in securities and securities options – continued to be taxed at BR while the code change was under review.
As a result of discussions with interested parties, from 6 April 2012, the 0T tax code should be used on a non-cumulative basis to deduct tax on share-based payments made to an employee after cessation of employment and which have not been included in the form P45.
The change will align all post-employment earnings under the same tax code.
In readiness for this change, amendments have been made to reg 37 of the Income Tax (PAYE) Regulations 2003 (SI 2003/2682). Comments on the amendments should be emailed no later than 16 February 2012.
