The Law Society has responded to HM Revenue & Customs and HM Treasury consultation regarding the simplification of tax and national insurance treatment of termination payments.

The mains points covered include:

1.That the distinction between contractual and non-contractual payments is an artificial distinction and should be removed.

2. That the proposal to limit the proposed relief to redundancy dismissals and length of service will be too complicated for the majority of employers to administer.

3. Relief should apply to all compensatory payments.

4. Income and NIC should be aligned.

5. The exemption for injury and disability should remain.