EIM13911 | Termination payments and benefits: example: section 401 ITEPA 2003: provider of the payment or benefit

Section 401 ITEPA 2003

An employee is dismissed with compensation of £50,000 on 3 November 2011. The employer does not meet the cost. Instead, it’s paid by the employer’s Canadian parent company. The employee never had a contract of employment with the latter.

Section 401 ITEPA 2003 applies to the £50,000 because the section applies whether the payment is provided by the employer, the former employer or by another person.