To ask the Chancellor of the Exchequer what guidance he issues on the treatment in the PAYE system of payments made to employees by way of compensation for breach of contract when they are not allowed to work their notice period; and if he will make a statement.

The Inland Revenue publication "Employer's Further Guide to Pay As You Earn" gives guidance in section L on the tax treatment of lump sum payments, including payments in lieu of notice, and advises employers who are uncertain about the position on any particular payment to contact their tax office. I have arranged for a copy of the employer's guide to be placed in the Library of the House.