HMRC – 0T Reversal Draft Regulations PublishedSaturday, January 21st, 2012
In our Newsletter at the start of the year, we advised that HMRC had announced on 20 December 2011 they were reversing their decision to tax post-termination share-related payments at tax code BR. From April 2011, all other post-termination payments (i.e. after the P45 has been issued) were taxed at 0T on a non-cumulative basis. Share-related income payments were the only exception. From April 2012, HMRC advised that all payments after leaving, however derived, would be taxed at 0T on a non-cumulative basis.
Such a decision required a change to the Income Tax (Pay As You Earn) Regulations 2003 – these were amended in 2011 by the Income Tax (Pay As You Earn) (Amendment) (No.2) Regulations 2011 that brought in the changes in the first place. In order to revoke these Regulations and ensure the necessary legislation is in place to tax all post-termination payments at 0T non-cumulative from 2012/13, HMRC have published their draft Regulations and Technical Note (The Income Tax (Pay As You Earn) (Amendment) Regulations 2012). These are open for comment until 16 February 2012.
As we commented in January 2012, where post-termination payments have been made up of more than one element, one of which is a share-based one, taxation of this has been an issue given the different tax treatment that we were required to operate. We welcome the publication of these Regulations which will see all post-termination payments being treated the same from the next tax year.
- Payroll Help 07 January 2012 – HMRC in 0T Reversal
- HMRC – The Income Tax (Pay As You Earn) (Amendment) Regulations 2012 Draft