Termination Payments Calculator
Accurate tax and NIC calculations to ensure your compliance and support you through change.
Termination Payments Calculator
Need help with your order?
Check our FAQs page or get in touch.
Why do I need a Termination Payments Calculator?
If your business needs to downsize, restructure or consider redundancies, the tax and national insurance contributions (NIC) complications can add to an already difficult process. Getting it right is critical to avoiding unexpected liabilities, costly mistakes or reputational damage.
When you make a termination payment, getting the tax/NIC right can be a minefield. Each case will be different and ensuring you have clearly understood the facts before calculating any potential tax/NIC liabilities is crucial. These calculations are often made in challenging circumstances for both you and your employees, adding to the pressure of getting them right.
Our bespoke calculator requires no tax technical knowledge to use and removes this complexity, and is designed to ensure your compliance, provide detailed analysis, and an audit trail with a bespoke report that can be shared with the employee. Coupled with expert guidance, it’s your key to making informed decisions with confidence.
Features and benefits
Easy to use – no tax or NIC knowledge needed
Save time – generate complex calculations quickly
Ensure compliance – Adhere to latest tax and NIC regulations
What’s included?
- Dynamic questionnaire to reduce data collection time
- Generate precise calculations based on individual employee data
- Bespoke reports for each employee
- Establish the correct UK tax/NIC position for any internationally mobile employees
- Live updates to the calculator when legislation or case law changes
- A secure portal for your employee data – you control access
- The BDO Employment Team are on hand to support you if you need any additional advice.
Termination Payments Calculator Pricing
30 days access Maximum of 5 reports
90 days access Maximum of 15 reports
365 days access Maximum of 50 reports
How to purchase this tool
Book a demo
Contact us for a no-obligation demonstration. If your organisation requires bespoke features, we will discuss customisation to your unique requirements and provide you with a quote.
Client onboarding and conflict checks
Once you have expressed interest in purchasing access to the tool, as with any BDO service we will commence our client onboarding and conflict of interest checks process.
Success
We will set up your secure portal, arrange access for relevant staff and make access to the termination payments tool .
FAQs
How does HMRC view a Termination payment?
When a payment is made to an employee in connection with or due to their employment termination, it is termed a Relevant Termination Award (RTA). An RTA includes payments made in connection with the loss of employment, with the exclusion of statutory redundancy pay.
What is Post Employment Notice Payment (PENP)?
The first element of an RTA is the PENP, and this features in most termination payments. It is calculated using a fixed formula, the elements of which can be difficult to determine. The PENP element of an RTA is liable to PAYE and both employees and employers NICs.
Are Payments in Lieu of Notice (Pilons) still a consideration?
Pilons often feature in employment contracts and are an important legal consideration. From a tax/NIC perspective, any PENP calculation will need to account for the “Pilon” element of a termination payment.
How does the £30,000 tax relief work?
Termination payments that exceed the PENP may qualify for a tax exemption of up to £30,000. However, additional complexities might affect this relief, so it is important to get professional advice.
How does the termination payments calculator work?
Input relevant data through an online questionnaire, and the calculator generates a detailed report of the termination payment.
What are the risks of getting it wrong?
Incorrect calculations can result in penalties, additional tax liabilities, and reputational damage. For SAO businesses, it may also jeopardise compliance credentials.
Can BDO help with complex cases?
Yes! Our tool is designed to accommodate a range of scenarios, and our experts are available to provide bespoke advice for more intricate cases.
Are termination payments always liable to tax/NIC?
Not always. For example, if the termination of employment is for medical reasons (physical or mental) then it’s possible a termination payment can be made free of tax or NICs in full.
How else can you help with international mobile employees?
We can provide advisory services in other jurisdictions. Please contact us to speak to one of our experts.
Book a demo
Please provide your contact details below, and we'll be in touch to arrange a demonstration of the Termination Payments Calculator.
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