Way out of the maze

I read with interest Heidi Poon’s article Way out of the maze particularly the commentary on the Goldberg case.

Ms Poon points out that the agreement reached between Mr Goldberg and his then employer for a payment in lieu of notice could be regarded as an amendment to the employment terms as it occurred before the formal date of termination.

Of course HMRC is on written record as regarding such an agreement as not amending the employment terms providing agreement is reached as part of the process of termination: the discussions take place after the employee is notified that termination is in prospect (see Employment Income Manual paragraph EIM12979).

Employment lawyers rely on this statement a lot as most well-advised employers enter into a compromise agreement with an exiting employee before the termination date wherever possible.

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