Court Wins

cybermoney

Do court wins get taxed?

i.e. do I have to declare? The sum is between 5k-10k.

dmg24

It depends on what the 'win' was for.

cybermoney

It was a claim put in from me, because somebody stole assets that belonged to my company.

Vomityspice

dmg24 wrote: »

It depends on what the 'win' was for.

Last year I took my previous employer to court as they failed to pay me correctly when I left. When I received the cheque, I still had to pay tax and NI as it was income.

Vomityspice

cybermoney wrote: »

It was a claim put in from me, because somebody stole assets that belonged to my company.

So was the asset the company's (is it a Ltd / Partnership / Sole Trader)

What was the asset?

If it was the Ltd assest then it would go back to the Ltd. Did you write down the asset in your accounts? (i.e. claimed a tax benefit on it).

If not, should be straight forward, just account for it correctly and pay any corporation tax that may be due.

cybermoney

But could I not get away with just putting it all into my personal account? Or is the sum too large?

Vomityspice

cybermoney wrote: »

But could I not get away with just putting it all into my personal account? Or is the sum too large?

You could but it is not yours! It is the company's asset. I'm assuming this is a Ltd (if not clarify). You CANNOT just use a Ltd money and put it in your personal account. You would be breaching a number of regulations outlined in the Company Act. This is a big no no!

If it was a company asset, then it has to be returned to the Ltd. Remember, the Ltd is it own legal identity! You may be the only shareholder of the Ltd, but HMRC and Company's House won't look kindly on clear and flagrant breaches of the rules. How are you expecting to 'lose' the asset in you accounts filing?

You are hopefully not suggesting committing fraud in an attempt to avoid complying with your obligation? If you do it,don't be surprised to 1) receive a fine for filing false accounts, 2) Potential for criminal prosecution (Max 2 years in prison AND unlimited fine) and 3) Automatically stuck off as a Director.

Ask your accountant if you need further guidance on why this is a really bad idea.