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Ben Jones
Ben Jones, UK Lawyer
Category: UK Employment Law
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Hello: I am going to leave my work and am negotiating a compromise

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I am going to leave my work and am negotiating a compromise agreement with my employer.
I got some deferred awards in the past, in the form of company stocks, that will be paid to me in the future, after my termination, some of them in 2 years.
Since i will no longer be an employee of the company I am curious of how this will work in terms of national insurance and taxes in the uk. Will my company issue a one off salary statement with usual deductions (including them paying their portion of national insurance), or will they pay me the amounts gross and I have to declare and pay directly to HMRC and NIS? Many thanks for your help.

Ben Jones :

Hello, my name is XXXXX XXXXX it is my pleasure to assist you with your question today.

When it comes to tax and NI liabilities in respect of options or shares that are exercised after the end of employment, these will be taxable in the same way as if this had been done whilst the employee was still in employment with the company.


The employer can now apply a special tax code to deduct tax and NI from payments given to an ex-employee following the termination of their employment.


The usual ways for recovering PAYE and NI in these circumstances are:

  • Withholding through the sale of the shares acquired on the exercise of options or the vesting of share awards.

  • Requiring the payment of the PAYE and NICs as a condition of exercise or vesting.

  • Deducting these amounts from any salary or termination payment.



Ben Jones :

Has this answered your query or do you need me to clarify anything further?


because i am not an employee anymore, am i guaranteed the employer will pay its part of the NI?

Ben Jones :

you should deal with this in the agreement you enter into with the employer but if they do not and you find out this is the case you can advise HMRC who will take measures to pursue this

Ben Jones :

Has this clarified the query you had?


ok thanks


could you please make this conversation not viewable by others? Many thanks


excellent service

Ben Jones :

thank you and all the best

Ben Jones and other UK Employment Law Specialists are ready to help you

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