Termination payment: tax-free limit

How much of a termination payment can be paid free of income tax.

£30,000.00

Corroborated Act of Parliament Great Britain in force since 2003-04-06

Checked against its sources: statute verified 2026-09-21·guidance verified 2026-09-21

Scope: Unchanged since the Act's enactment; the 2017 amendment resolved here changed a word of s.403(1) (post-employment notice pay is excluded by s.402B), not the sum. GOV.UK states the threshold in the redundancy context, which is the sentence registered.

Current sources

Source A · LegislationIncome Tax (Earnings and Pensions) Act 2003, c. 1 s. 403(1) ("The amount of a payment or benefit to which this Chapter applies counts as employment income of the employee or former employee for the relevant tax year if and to the extent that it exceeds the £30,000 threshold")

retrieved 2026-09-08

Source B · Official guidancehttps://www.gov.uk/api/content/redundancy-your-rights/tax ("Statutory redundancy pay under £30,000 is not taxable")

retrieved 2026-09-08

History

Value	From	To	Status	Sources
£30,000.00	2003-04-06	—	Corroborated	Legislation: Income Tax (Earnings and Pensions) Act 2003, c. 1 s. 403(1) ("The amount of a payment or benefit to which this Chapter applies counts as employment income of the employee or former employee for the relevant tax year if and to the extent that it exceeds the £30,000 threshold") retrieved 2026-09-08 Official guidance: https://www.gov.uk/api/content/redundancy-your-rights/tax ("Statutory redundancy pay under £30,000 is not taxable") retrieved 2026-09-08

Receipt

Everything above is reproducible and independently checkable — no trust in this site required (how verification works).

Figure ID: employment.termination.tax_free_threshold
Name in the API: Termination payments: tax-free threshold
Record fields (source type · unit · jurisdiction · status): act·GBP·GB·corroborated
Record hash (canonical JSON, SHA-256): sha256:d65b4102e7f1071810fa163ad02c8d334002220cde1cb79df887c240abad902b
Source snapshots (SHA-256): Legislation: sha256:63a8e3530603b3c83f20a0e3b234dc9f2d3602d6263495a0cc1bb0d5a8e8dcf6; Official guidance: sha256:04ca6f602e490a55b0a44bfb9fadfa3b0f8985a5587c3b7d264afb86b571efd0
Listed in the signed manifest: release 3.0.0 manifest · record_hashes["employment.termination.tax_free_threshold"]
Machine-readable record: /v1/figures/employment.termination.tax_free_threshold · current only: /v1/figures/employment.termination.tax_free_threshold/current

Compiler's notes

The touching note — "Word in s. 403(1) substituted (with effect in accordance with s. 5(10) of the amending Act) by Finance (No. 2) Act 2017" — carries no date; F(No.2)A 2017 s5(10) states the tax year 2018-19, recorded in the block as resolved. The locator phrase is read from s.403(1) because "the £30,000 threshold" recurs in (4) and (5). effective_from is ITEPA's own original text: the £30,000 has stood in s.403(1) since enactment, and that 2018 note substituted the word "section" — the probe reports it as touching other words, not the value. The date is the RestrictStartDate legislation.gov.uk gives ITEPA's unamended original text, read on the archived s.234 P1group (RestrictStartDate="2003-04-06"); ITEPA's own commencement provision, s.723, is not archived.