EIM68228 - Tax treatment of Post Office employees: sub-postmasters: payments on termination of office

EIM68220 listed the main terminal payments made to sub-postmasters.

Closure payments are connected with the termination of the office of subpostmaster and so are chargeable only under section 401 ITEPA 2003 (see EIM13000 and below). Examples are:

  • payments made by the Post Office Discretionary Fund - paid where the Post Office decides to close or relocate a branch
  • payments under network rationalisation initiatives such as the Urban Network Reinvention Scheme from 2002

If the aggregate of payments exceeds 拢30,000, the excess counts as employment income (see EIM00512) for the year of receipt (see EIM13505 and EIM13100). Where a sub-postmaster鈥檚 remuneration has been included with trading receipts chargeable as trading income (see EIM68205) the excess over 拢30,000 should not be included in the Case 1 computation.

For the treatment of surplus payments, see EIM68225.