“More than a third of the elite UK universities were forced to make staff cuts last year.”

In Financial Times article dated the 20 January 2025, the above introduction was accompanied by the statement that severance spending across the Russell Group of Universities rose by more than a fifth, the reason being a drop in International students.

It was further reported that ten of the 24 universities in the group ran voluntary severance schemes in 2024. Collectively, the universities in the group spent £70m on severance pay last academic year.

This article does not offer any political commentary on this revelation, rather we focus here on the Income tax and National Insurance (NI) treatment of these packages.

From experience, these payments are not always treated correctly resulting in HMRC being able to recover Income tax and NI liabilities with penalties and interest also being levied.

Read our full article here: