No win no fee earnings and Income Tax

bartes

Hello,

This is the first time that I use this forum, is this the right section to ask this question?

I won a case against a company who gave me a bad reference that cost me a couple of good jobs, this was done as 'no win no fee'.

The solicitor involved told me that I probably wouldn't have to pay tax on the money received but he was very vague so I asked the Citizens Advice Bureau for advice, the person I spoke to was not too sure and advised me to ask the Inland Revenue and the Inland Revenue told me that in some cases I will have to pay tax but in others I don't have to pay tax.

I’ve spoken to an accountant about this and he told me that the company who gave me a bad reference compensated me for my loss and no tax is due, he also told me that would depend on the wording of the document from the solicitor, which should explicitly state the nature of the payment.

Is there a technical name for this document that the solicitor has to provide me with? If the solicitor is not willing to give me such a document can it mean that he is hiding something and the values that he received are higher than what he told me? Is there a way that I can force him to issue such a document?

This was for an out of court settlement.

Thanks,

Bartes