PAYE on loss of earnings

[mcsp-y]

Received compensation for loss of earnings. The loss of earnings period was from 2004 til now. Am I taxed on the total compensation this year (ie date of receipt) or is it taxed in the various tax years from 2004 (dates on which earnings were lost)?

[Ian Wright]

Income should be taxed on an arising basis and not when you eventually get it. There is some legislation to convince the tax office to split it out over the year if it saves tax. I would have to try and find where that is.

It is however possible that it is all taxable now as there is some tax case law which make the final payment taxable now. This was a case about a suspended police officer. It really depends on the the reason for the delay.

Ian