The National Insurance Contributions (Termination Awards and Sporting Testimonials) Bill, was introduced to Parliament on 25 April and received its second reading in the House of Commons on 30 April.
The Bill (bit.ly/2Y04lpn) will apply class 1A employer NICs with effect from 6 April 2020 to those parts of termination awards and sporting testimonial payments already liable to income tax. The 13.8% class 1A charge will apply to income derived from a termination payment above £30,000 and to non-contractual or non-customary sporting testimonials above a £100,000 threshold.
The government first announced its intention to align the PAYE and NICs treatment in 2015 and income tax changes took effect from April 2017 for sporting testimonial payments and April 2018 for termination payments. Introduction of the NICs Bill was postponed several times until a decision was taken on the future of class 2 NICs.
The National Insurance Contributions (Termination Awards and Sporting Testimonials) Bill, was introduced to Parliament on 25 April and received its second reading in the House of Commons on 30 April.
The Bill (bit.ly/2Y04lpn) will apply class 1A employer NICs with effect from 6 April 2020 to those parts of termination awards and sporting testimonial payments already liable to income tax. The 13.8% class 1A charge will apply to income derived from a termination payment above £30,000 and to non-contractual or non-customary sporting testimonials above a £100,000 threshold.
The government first announced its intention to align the PAYE and NICs treatment in 2015 and income tax changes took effect from April 2017 for sporting testimonial payments and April 2018 for termination payments. Introduction of the NICs Bill was postponed several times until a decision was taken on the future of class 2 NICs.
.jpg?sfvrsn=335a554c_0 "300 x 250 (MPU)")