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Have HMRC changed the way that they tax payments in lieu of notice? JOHN CHAPLIN investigates.
THE TAXATION OF severance payments has been the topic of much technical debate over the years, but an element of calm seemed to have been brought to the issue as case law clarified many of the points of contention between advisers and HMRC. That was until Tax Bulletin 63!
Have HMRC changed the way that they tax payments in lieu of notice? JOHN CHAPLIN investigates.
THE TAXATION OF severance payments has been the topic of much technical debate over the years but an element of calm seemed to have been brought to the issue as case law clarified many of the points of contention between advisers and HMRC. That was until Tax Bulletin 63!
In 'Black Is Not White — For Now' (Taxation 4 November 2004 page 130) David Heaton discussed the lack of symmetry between recent case law surrounding termination payments in particular Wilson v Clayton [2004] STC 1022 and Tax Bulletin 63. In that Bulletin HMRC gave their interpretation of the current law surrounding the taxation of payments in lieu of notice (PILONs) which seemed to be at odds with the common understanding of advisers. The author concluded his article...
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