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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

Tax

  • Salary and benefits
  • Payment in lieu of notice
  • Redundancy pay
  • Compensation payment
  • Post termination restrictions
  • Tax indemnity

020 3878 8700

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

Contact us by telephone, email or visit our offices in central London

Tax issues explained

Tax on severance pay, redundancy, accrued holiday and more

Who is liable for tax?

Main site

Visit the Aeon Solicitors main site, where you will find our law library, with information on a diverse range of employment law and commercial law issues, spanning contracts, post-termination restrictions, disciplinary and grievance, unfair dismissal and wrongful dismissal.

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