Newth Talks Tax: Tax on leaving employee

Tax on leaving employee

‘jh’ posed a question about a leaving employee on 23 August 2007. He was leaving on 31 August 2007, and had a few days holiday entitlement which the firm will pay in lieu of time off. The old rules stated that such a payment was taxable, but not subject to NIC. Is this still the case?

The firm were also paying the leaving employee one month’s pay in lieu of notice.

Continued...