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A partnership managed a works canteen for seven years at an agreed fee. Due to economic downturn, the company terminated the agreement unilaterally, and paid a sum of £12,570 equivalent to six months' management charges in lieu of notice.
The original management agreement specified six months notice, which was not honoured by the payment made. The Revenue, following an aspect enquiry, has stated that the compensation payment is taxable. In submitting final accounts, I claimed that the payment was exempt.
The original management agreement specified six months notice, which was not honoured by the payment made. The Revenue, following an aspect enquiry, has stated that the compensation payment is taxable. In submitting final accounts, I claimed that the payment was exempt.
A partnership managed a works canteen for seven years at an agreed fee. Due to economic downturn, the company terminated the agreement unilaterally, and paid a sum of £12,570 equivalent to six months' management charges in lieu of notice.
The original management agreement specified six months notice, which was not honoured by the payment made. The Revenue, following an aspect enquiry, has stated that the compensation payment is taxable. In submitting final accounts, I claimed that the payment was exempt.
There is no likelihood of a resumption of a business relationship, and the partnership was not aware of the possibility of the sequence of events that occurred, or had any expectation of receiving compensation.
Is the Revenue correct, and, if not, is the matter worth taking to the Commissioners?
(Query T15,686) CWE.
The original management agreement specified six months notice, which was not honoured by the payment made. The Revenue, following an aspect enquiry, has stated that the compensation payment is taxable. In submitting final accounts, I claimed that the payment was exempt.
There is no likelihood of a resumption of a business relationship, and the partnership was not aware of the possibility of the sequence of events that occurred, or had any expectation of receiving compensation.
Is the Revenue correct, and, if not, is the matter worth taking to the Commissioners?
(Query T15,686) CWE.
