HMRC has published its draft legislation concerning the proposed changes to the taxation of termination payments. The changes are expected to come into force in April 2018 as consultation on the proposed legislation continues until 5th October 2016. The proposed changes are to make all PILON payments taxable and subject to class 1 NIC’s deductions […]
Sarah King Employment Solicitor
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News – Compromise/settlement agreements
Tax treatment of termination payments
Following my Tweet on the day of the Budget from April 2018, termination payments that are subject to income tax on amounts in excess of £30,000 will be subject to employer national insurance contributions. The £30,000 exemption will remain and that the whole termination payment will be outside the scope of employee NICs. In addition, […]
Consultation on Termination Payments
The Government is considering how they can make the tax and National Insurance treatment of taxation of termination payments simpler and fairer and is seeking views from interested parties as to how this can be achieved. At present, there is a £30,000.00 termination payment which can be made free of tax and National Insurance providing […]
Why do employers offer settlement agreements?
Firstly, what is a settlement agreement? Well it is a legally binding agreement usually between an employee and their employer whereby the employer offers the employee a lump sum in excess of their normal entitlement to compromise any employment claims they may have. It must meet certain legal requirements to be a valid settlement agreement one […]
Protected conversations
Historically employers have been concerned over without prejudice discussions and whether they can be relied on later. Some employers are scared of saying the wrong thing or whether they are doing the right thing. The difficulty with without prejudice is that there has to be a dispute between the parties. Something that in itself can […]
Settlement Agreements
Here in the UK the only regional differences in settlement agreements are the normal rates for advice contained within them. In some regions the legal fees are £500 plus VAT as standard and the lowest I have seen recently just £200 plus VAT. The same cannot be said for the UK and Ireland. In Ireland, […]
Confidentiality in Settlement Agreements
You may recall that there has been much press coverage over the past 12 months or so about the use of compromise agreements/settlement agreements particularly in the public sector where employees are being exited and asked to sign confidentiality clauses in return for their settlement. The use of “gagging clauses” is widespread but in the […]
Settlement Agreements
I often get asked what sort of amendments are usually needed to compromise agreements, which have of course been renamed settlement agreements. Well I can count on one hand the amount of times that I have signed a compromise agreement in its first draft. As it has been drafted by the employer, it is common […]
Improper behaviour in settlement discussions
Settlement discussions and pre-termination remain the hot topic at the moment as they bed into practice. The discussions are confidential and cannot be used in evidence in ordinary unfair dismissal cases. No such rules apply in automatically unfair dismissal cases or other claims such as discrimination claims. If the discussions arose out of an existing dispute […]
Settlement Agreements
The new settlement agreements are now of course in place to replace “compromise agreements”. These apply to all employment law claims. There are of course no such stringent requirements to settle an ordinary contractual dispute before the County Court. The age old rules of offer, acceptance and consideration apply here. Rather unfortunate that the firm […]
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