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Disguised remuneration

Employee settlement terms

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I'm not sure if anyone will be able to confirm this as the legislation is new and evolving all the time.

HMRC originally stated that if an employee settled rather than an employer, they would pay the 'same amount of Income Tax and NIC that the employer would have paid'.  Later guidance states that 'if the employer no longer exists, the employee will not have to pay any NICs'.

My query involves one of my clients that has been in liquidation for a couple of years.  For whatever reason, HMRC have objected to the strike off but that is irrelevant to this query.  As the employer no longer exists (ie, there is no PAYE scheme) but the company has not been struck off, does anyone consider that the employee would not have to pay NIC on a personal settlement?

Any views would be appreciated. 



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16th Aug 2018 10:58
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to Justin Bryant
16th Aug 2018 11:46

Hi Justin, thanks for your reply. So the answer is that nobody is sure! I will probably claim that the employer no longer exists when I submit the settlement packs for the two directors and see what HMRC calculate.

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