HMRC is raising awareness of the tax treatment of termination payments related to income tax and National Insurance contributions (NIC).

Several changes have been made to these rules over the past five years, which HMRC wants to remind accountants and employers to consider when finalising severance packages.

These include the introduction of post-employment notice pay, alignment of the rules for income tax and NICs, removal of foreign service relief on termination payments to UK resident individuals and clarification that the exemption for injury does not apply to injury to feelings.