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The appellant resigned from his job after receiving a final written warning for alleged breaches of his employer’s compliance manual.
He believed he had no option but to resign as he was being intimidated for whistle blowing on the employer’s recruitment processes. He therefore sued for unfair dismissal.
The claim was settled by mediation with the employer paying him £250 000 and his legal expenses. HMRC amended his self-assessment return assessing the payment to tax.
The taxpayer appealed.
The issue concerned how much of the payment fell within ITEPA 2003 s 401(1) as a payment in connection to the termination of his employment.
The Special Commissioner found that the compensation paid except for that allocated to injury of feelings was directly connected with the termination of the employment.
Apart from the £30 000 exemption all of it was employment income. The compensation of injury...
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