There have been a number of recent changes to the rules on the taxation of termination payments, most notably relating to payments in lieu of notice (PILONs). It was also planned that any termination payment in excess of £30,000 would be subject to employer NICs from April 2018, but this change was delayed to April 2019. The autumn budget made clear that this change will be further delayed and will now only apply to a termination payment made on or after 6 April 2020. This means that, until this date, the additional NICs cost to employers of making a termination payment under a settlement agreement will be avoided. The existing employee NICs exemption will remain in place however.

For further information, see https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/752202/Budget_2018_red_web.pdf