EIM68228 - Tax treatment of Post Office employees: sub-postmasters: payments on termination of office

EIM68220 listed the main terminal payments made to sub-postmasters.

Closure payments are connected with the termination of the office of subpostmaster and so are chargeable only under section 401 ITEPA 2003 (see EIM13000 and below). Examples are:

• payments made by the Post Office Discretionary Fund - paid where the Post Office decides to close or relocate a branch
• payments under network rationalisation initiatives such as the Urban Network Reinvention Scheme from 2002

If the aggregate of payments exceeds £30,000, the excess counts as employment income (see EIM00512) for the year of receipt (see EIM13505 and EIM13100). Where a sub-postmaster’s remuneration has been included with trading receipts chargeable as trading income (see EIM68205) the excess over £30,000 should not be included in the Case 1 computation.

For the treatment of surplus payments, see EIM68225.