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HMRC issues guidance on share-based payments made after the cessation of employment

6 August 2012 | Alasdair Friend

This guidance sets out answers to frequently asked questions concerning the application of the ‘0T’ tax code to share-based payments made following the cessation of employment.

From 6 April 2012 the 0T tax code must be applied to share-based payments made following the termination of employment and the issue of the P45. Please see the link to our article in the Resources section below which sets out details of this change.

The most interesting of the points covered in HMRC’s guidance is that where an NT (no tax) tax code is in effect prior to the employee leaving employment, the 0T code should not be operated and the NT code should continue to be applied.

Resources

Change to way tax is withheld from post-termination share based earnings

Payments of share-based earnings made after an employment has ceased that have not been included in Form P45

For further information or to discuss the issues raised, please get in touch.

Disclaimer

Content is for general information purposes only. The information provided is not intended to be comprehensive and it does not constitute or contain legal or other advice. If you require assistance in relation to any issue please seek specific advice relevant to your particular circumstances. In particular, no responsibility shall be accepted by the authors or by Abbiss Cadres LLP for any losses occasioned by reliance on any content appearing on or accessible from this article. For further legal information click here.

Circular 230 disclosure

To ensure compliance with requirements imposed by the IRS and other taxing authorities, we inform you that any tax advice contained in this article (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties that may be imposed on any taxpayer or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.

The author

Alasdair Friend
Partner
Compensation and Benefits
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