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EIM13874 explains that, with effect from 6 April 2018, the post-employment notice pay element of all ‘relevant termination awards� is chargeable to income tax as general earnings. Post-employment notice pay is calculated using the PENP formula (see EIM13880).

In the PENP formula, ‘D� is the number of calendar days in the ‘post-employment notice period�. The ‘post-employment notice period� is the period beginning at the end of the last day of employment and ending with the ‘earliest lawful termination date�.

EIM13898 provides the definition of ‘earliest lawful termination date�.

Where an employee’s employment contract is a ‘limited-term contract� and does not include a requirement for notice to be given by either the employee, or the employer before the employment is terminated then the ‘post-employment notice period� is the period beginning at the end of the last day of employment and ending with the day of the occurrence of the ‘limiting event� (see example 3 at EIM13892).

EIM13890 explains how to calculate ‘D� where the employment contract is not a ‘limited-term contract�.

EIM13898 provides the definitions of ‘limited-term contract� and ‘limiting event�.