Employee tax | Recent developments

HMRC announced in the February 2024 issue of the Employer Bulletin that it is aligning its approach to providing advance assurance on certain termination payment enquiries.

Previously, HMRC's guidance committed it to giving a binding answer if an employer or agent made enquiries on certain termination cases, including those involving the disability and injury compensation exception, the foreign service exception, how the £30,000 threshold exemption applies to payments and non-cash provisions.

HMRC has announced that it will no longer give a binding answer on these cases outside the normal non-statutory clearance process.

This change means that such queries can only now be raised under HMRC's non-statutory clearance process, which requires there to be a genuine point of uncertainty on the correct treatment.

HMRC updates

HMRC has updated a number of its webpages on gov.uk to reflect the 2024/25 tax year, including its Further guide to PAYE and National Insurance contributions (CWG2). This guidance was updated on 6 April 2024 to state that employers no longer need to tell HMRC if they want to pay a tax-free lump sum over £30,000 to an employee who cannot work due to disability, injury or ill health, and to add new rules about making advance salary payments to employees.

Please get in touch with your usual Osborne Clarke contact or one of the experts below if you have any queries or would like to discuss further.