The express aim of the proposed changes is to simplify the current position. However, the draft legislation suggests that the opposite might well be the result. Alasdair Friend (Baker & McKenzie) reviews the consultation document.
HMRC has long considered that the rules governing the taxation of termination payments are too complex and are susceptible to manipulation to minimise tax payable. Its consultation paper issued in July 2015 sought opinions on various proposals intended to simplify and tighten the rules. This new document and draft legislation are a response to that consultation. The proposed new legislation would apply to termination payments from April 2018.
