Termination payments are defined in the Termination payments ― overview guidance note.

Termination payments can take the form of cash, benefits or both. The payment will either be fully taxable, partially taxable or fully exempt depending on the nature and the amount of the payment.

Depending on the circumstances, termination payments can be categorised as one of the following, each with their own tax and NIC treatment:

1. •

   earnings ― see the Taxation of cash employment termination payments guidance note

2. •

   benefits in kind ― see the Taxation of non-cash employment termination payments guidance note

3. •

   restrictive covenants ― see the Taxation of payments for restrictive covenants guidance note

4. •

   benefits from an employer-financed retirement benefits scheme (EFRBS) ― see the Employer-financed retirement benefit schemes (EFRBS) ― overview guidance note

5. •

   termination