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My client provides professional services. In carrying out work for a client the rules of their institute were infringed. This was not intentional but there was obviously a lack of care.
A fine was levied on one of the directors for this infringement and the firm has agreed to pay the penalty – a five figure sum – on their behalf.
Can Taxation readers advise on whether this is deductible in the firm’s accounts and would there be an income tax and National Insurance liability on the employee? For the future would it make any difference if a contract of employment confirmed that the firm would indemnify its employees?
Query 19 837 – Blunder.
Payment of a personal liability is taxed on the ‘money’s worth’ principle.
The fine in this case was imposed on the director personally. Settlement by the company of a personal liability is subject...
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