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, legislation will be introduced to ensure that all payments in lieu of notice and certain damages payments are taxed as earnings. The foreign service exemption will also be abolished. The Government intends that these changes will be introduced in the Finance Bill 2017 and consultation over the technical details will commence in the summer of 2016.