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Post termination restrictions
The settlement agreement may contain post termination restrictions prohibiting the employee from competing or dealing with the employer's clients and suppliers.
To give effect to these restrictive covenants the employer has to make a payment against the employee's undertaking, and in the settlement agreement this is expressed as being taxable.
Other elements of the termination package are taxed differently:
Salary and benefits
Payment in lieu of notice
Redundancy pay
Compensation payment
Tax indemnity
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What is a settlement agreement?
When are they used? What's in them?
Our settlement agreement solicitors advise about settlement agreements
How much compensation?
Identifying legal claims through tailored advice
Consult our settlement agreement guide
Redundancy
Is a settlement agreement offered when staff are redundant?
Ask our redundancy solicitors
Settlement agreement solicitor London
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Tax issues explained
Tax on severance pay, redundancy, accrued holiday and more
Who is liable for tax?
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