Taxation of termination payments

The tax treatment of termination payments changed last April. All payments in lieu of notice are now subject to tax and national insurance contributions, whether or not they are contractual. There are different formulas to calculate the taxable sum (an easy and a hard version) depending on various factors and whilst the intention was to simplify the law in this area, it has led to employers having to do some rather complicated calculations to determine what portion of a payment is taxable.