Taxing question

Mousey_2

Hi I'm about to be sued by my former employer for breaching my employment contract by not giving enough notice.I thought I had a case for constructive dismisal put when I saw a solicitor he said that I would have very little chance of success. My former employer has now got someone else in on a lot more money plus hotel bills etc. He intends to sue me for the difference between what my wages would have been and what he claims it is costing for this new person. I thinking of paying up to be rid of my former employer but would like to know if this payment could be used as an expense to reduce my tax liability.

jimmo

My first reaction on reading your post was “Absolutely No!”
In order to be allowable as expenses any expenditure has to be incurred wholly, exclusively and necessarily in the performance of the duties of the employment.
That rule is very strictly enforced.
However, on further thought, if your former employer is seeking to recover from you any of the wages he has paid to you that would reduce your taxable earnings.
Slim hope I fear.