Compensation payment tax question

sumsolus

Hello

Can anyone answer this question for me please!

If I receive a payment in the form of a cheque from my employer for equal pay compensation owed from the last 6 years and they have stated that they are going to pay the tax and national insurance for the sum provided before i receive the cheque.

My question is once I have received this cheque will it then show on my end of year p60 for total earnings for April 2009 - March 2010?

fengirl_2

It sounds as if your employer has entered into a PAYE Settlement Agreement in whcih case it wont appear on your P60 or your P11d.

Mikeyorks

sumsolus wrote: »

My question is once I have received this cheque will it then show on my end of year p60 for total earnings for April 2009 - March 2010?

No .... because it doesn't (only) relate to 09-10. And is an exception from the general rule that tax is due when the money is paid .... in this case the tax relates to the whole of the period when the arrears accrued.

It's broadly covered here :-

http://www.hmrc.gov.uk/manuals/eimanual/EIM02530.htm

..... as fengirl says - it's possible they've agreed an overall settlement with HMRC as otherwise they (and HMRC) are faced with supplementary returns for each of 6 years.

sumsolus

Hello thanks for replys

They state in letter that they have made arangement with tax office and state that it wont affect childrens tax credits I just wondered if it would show on my end of year p60 that I have received it as this would make my income for that year look more than it really was

Mikeyorks

I doubt any of it will appear in the P60. The letter you have appears to confirm that?