![]() ![]() This change only affects individuals who physically performed the duties of their employment in the UK. The measure will ensure that non-residents are charged to tax and National Insurance contributions on PENP to the extent that they would have worked in the UK during their notice period. Currently, PENP is not chargeable to UK tax if an employee is non-resident for the tax year in which their employment terminates. The measure also aligns the tax treatment of PENP for individuals who are non-resident in the year of termination of their UK employment with the treatment for all UK residents. This measure provides an alternative PENP calculation where an employee’s pay period is defined in months, but their contractual notice period or post-employment notice period is not a whole number of months. The part of a termination payment which is treated as being a payment in respect of the employee’s notice period and subject to income tax and employee’s and employer’s National Insurance contributions is called ‘the Post-Employment Notice Pay’ ( PENP). ![]() Employers who make termination payments and employees who receive termination payments. ![]()
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May 2023
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