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Where Taxpayers and Advisers Meet


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


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


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?

Posts: 80
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.....

Posts: 3090
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.

Posts: 80
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.

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