This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our Cookie Policy.
Analytics

Tools which collect anonymous data to enable us to see how visitors use our site and how it performs. We use this to improve our products, services and user experience.

Essential

Tools that enable essential services and functionality, including identity verification, service continuity and site security.

Where Taxpayers and Advisers Meet

Settlement

Piglet4pooh
Posts: 1
Joined: Tue May 28, 2019 9:46 pm

Settlement

Postby Piglet4pooh » Tue May 28, 2019 9:50 pm

Hello

My friend is self employed sole trader and worked for a company which was 90% of his work, he sued a company for no holiday unfair dismissal non pension and illegal working hours. The company and my friend agreed on a out of court settlement, I am there accountant so need to know if any of it is taxable as there is no breakdown on the settlement agreement contract, and it’s not clear if any of it should be taxed?
Help
Thanks

Jholm
Posts: 55
Joined: Mon Mar 11, 2019 4:22 pm

Re: Settlement

Postby Jholm » Wed May 29, 2019 9:50 am

Sounds horribly like employment, not self-employment.....

bd6759
Posts: 3069
Joined: Sat Feb 01, 2014 3:26 pm

Re: Settlement

Postby bd6759 » Wed May 29, 2019 5:43 pm

I concur.

And it is probably taxable.

Jholm
Posts: 55
Joined: Mon Mar 11, 2019 4:22 pm

Re: Settlement

Postby Jholm » Thu May 30, 2019 8:34 am

You need to know the basis on which the settlement was made. Based on the fact you state he sued them for no holiday, I would assume that at least this element should be deemed employment income since he would have paid PAYE and class 1 NICs on that had it arisen at the time.


Return to “Income Tax”