Lump sum payment in lieu of pension rights

[Lawrence McAulay 01]

A company has ceased to trade and is about to distribute its assets and have itself struck off.

One thing remains to be done first in connection with one of the directors. He is entitled to a pension running from his 75th birthday until death. He is now 73. His contract of employment was due to terminate at 75. The company has agreed to pay him a lump sum in return for his surrender of his pension rights.

As this is a payment on retirement, I don't suppose we can have it taxed under S401 and get the £30,000 exemption.

What isn't so clear is the employers' NIC position. I am finding HMRC guidance on NIC pretty confusing and contradictory. Does anyone have a view.

Many thanks.