TERMINATION - 03.11.2020
Q&A - new cap on exit payments?
Q. We’ve heard that a mandatory cap has been introduced on exit payments made to employees. Is this true?
A. Yes, a cap of £95,000 came into effect on 4 November 2020 , but it only applies to exit payments that are made to employees by public sector organisations on or after that date. Public sector organisations can include local government employers, maintained schools, academy schools, the NHS, police forces, fire authorities, the civil service and executive agencies.
There is no cap on any exit payments that are made to employees in all other sectors.
From 4 November 2020 a cap of £95,000 is applied to exit payments that are made to employees by public sector organisations, e.g. the NHS and local authority employers. There is no cap on exit payments made to employees in other sectors.
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