SE13005 - Termination payments and benefits: types of payment within Section 148 ICTA 1988
Section 148 ICTA 1988
| Type of Payment | Notes |
| Compensation for loss of office or employment (“golden handshakes”) | This represents
compensation for loss of the employment. It will often be
calculated as damages (see
SE13070).
Payments are sometimes mistakenly called compensation for loss of office. In particular, if a payment has its source in the terms of employment it is not compensation for loss of employment, but rather emoluments from the employment chargeable under Section 19 ICTA 1988 (see SE00630 –00635, SE12850 and example at example SE13920) Compensation for loss of employment by reason of redundancy will always be within Section 148 ICTA 1988 (see SE13750). If compensation appears excessive, see SE12852 |
| Salary or wages in lieu of notice | Section 148 ICTA 1988
applies where the employee is entitled only to notice but the
employer fails or refuses to give it (see
SE12978)
Note that Section 19 ICTA 1988 applies if the terms and conditions of employment are the source of the payment ( SE12976) or if there is a custom or practice (see SE12977). |
| Damages for breach of contract of employment | Section 148 ICTA 1988
applies if the payment or benefit is compensation for cancellation
of the service agreement (see example at example
SE13922.)
See SE13070 regarding the proper calculation of damages. |
| Redundancy payments | See SE13750 |
| Certain compensation paid under the Employment Rights Act 1996 | See SE12950 |
Note that:
- a gratuity given on or after retirement is taxed under Section 596A ICTA 1988 in priority to Section 148 ICTA 1988: see SE15000 and subsequent instructions
- A lump sum to commute (replace) a pension or pension rights may be exempt (see SE13660)or, in the case of a payment to commute pensions from non-approved retirement benefits scheme, chargeable under Section 596A ICTA 1988 (see SE15000)
Payments chargeable under Section 148 ICTA 1988 are subject to certain exemptions and relief: see SE13500
