Summary of the Finance Bill 2020-21 draft clauses

The initial draft clauses for the 2021 Finance Act were published on 21 July 2020 and include more detail on proposals that have already been announced. The final contents of the bill will be subject to confirmation at autumn Budget 2020.

This article is based on the Simon’s Taxes summary of the draft Finance Bill provisions. 

Termination payments

Changes will be made to improve the fairness of post-employment notice pay (PENP) legislation so that individuals will not receive more or less favourable tax treatment depending on their contract or residence status.

A new PENP calculation will be used when an employee’s pay period is defined in months but their contractual notice period or post-employment notice period is not a whole number of months. This will provide consistency of treatment for employees regardless of the length of their notice period or post-employment notice period.

This...