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Termination settlement reporting requirements revealed

Regulations have been made to impose reporting requirements on employers who provide payments or benefits to employees after termination of the employment.

The regulations are needed as a consequence of the new termination settlement rules introduced by the Finance Act 1998 under which cash instalments and non-cash benefits are taxed as income of the tax year in which they are received.

The Income Tax (Employment)(Amendment No2) Regulations 1999 SI 1999 No 7 require employers to make a one-off report to the Revenue about termination settlements made in a particular year.

The report must be made within 92 days of the end of the tax year and for each settlement it must include the following details:

the total amount of the payments and other benefits awarded;

the total amount of the payments made in that year;

details of the non-cash benefits provided in that year;

the estimated total amount of the payments to be made in subsequent years;

a description of each of the other benefits to be provided in subsequent years, and the terms of their provision.


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