Corporation Tax Act 2009 section 76

Redundancy payments and approved contractual payments

Section 76 sets out the circumstances in which tax deductions may be available when a company makes redundancy payments or approved contractual payments to employees, and defines the key terms used in the related provisions.

• The rules apply when a company makes a redundancy payment or an approved contractual payment to an employee in respect of employment wholly or partly in the employer's trade
• A redundancy payment is one payable under the statutory redundancy provisions in the Employment Rights Act 1996 (or the equivalent Northern Ireland legislation)
• A contractual payment is one that an employer is liable to make under an agreement when an employee's contract of employment is terminated
• A contractual payment is only "approved" if a relevant order is in force under section 157 of the Employment Rights Act 1996 (or the Northern Ireland equivalent), which allows certain contractual schemes to replace statutory redundancy entitlements