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The taxpayer had been employed by the Babcock group from 1973 until he was made redundant in August 2005.
When his employment was terminated he received a payment of over £91 000 nearly £30 000 of which comprised payment in lieu of notice with the balance being a redundancy payment.
In his amended self assessment tax return for 2005/06 the taxpayer claimed a deduction of £30 000 under ITEPA 2003 s 403(1) which HMRC subsequently disallowed.
The argument before the First-tier Tribunal was whether the £30 000 exemption was still available to be used against the 2006 redundancy payment.
The issue arose because the taxpayer had received a payment of £33 148.71 in 1996 as damages in respect of a reduction in his terms and conditions of employment.
When he was made redundant in 2005 the...
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