Employment Tribunal Award help please?

tonyfaestoney

Hi there, recently won a case of "whistleblowing". An award has been made and everything used to calculate that award has been based on my NET earnings.

When the Judge announced the award, I was surprised it was a lower figure than expected. It was my understanding the Tribunal "GROSS" up any award to account for taxation.

I have asked my solicitor who told me to talk to a tax expert, I have asked ACAS and asked the court albeit was an admin I spoke to. Nobody can give me a clear answer.

I have instructed my solicitor that they should be clarifying with the court.

Does anyone know the answer? The award was £114,000 but that is based on NET Losses. Does the employer automatically pay the tax or should I be wary of the Tax man?

Any help would be greatly appreciated.

sangie595

I am reaching here, because it's in my head but not precisely! For definite, the first £30k is tax free. After that, if I recall correctly there is no guidance on awards over £ 69k. Between the two, the guidance says that the amount exceeding the tax free limit should be grossed up too the employees marginal tax rate. But over that the tribunal had latitude to decide whether or not to gross up. But I think your solicitor is correct - you need to speak to a tax expert about the tax implications of this.

It may be possible to still ask the tribunal to review their judgement, but if not, then there is nothing you can do, as far as I am aware. Challenging the judgement through appeal can only be done on a point of law, and there isn't any law on this.

tonyfaestoney

Everything I have read has stated the Judge will "gross up". He has clearly detailed the losses I have suffered and should not have. He has detailed those amounts as NET.

I find it strange that he agrees in no way should I have suffered a loss but then I will be if tax liable.

Also strange that nobody has a clear answer. There has to be a ruling for this type of event.

Will chase my solicitor.

You are right though, I am still within a period to appeal but the period to have judgement reviewed has now passed.

Oh forgot to mention, even contacted HMRC and they didn't know lol,

Thanks for your advice, really is appreciated.

sangie595

I had to go away and check this out - it isn't something I deal with on a day to day basis! The guidance refers to the taxation of amounts between the £30k and the statutory cap - which is now nearly £79k (my memory was a bit faulty as to what the guidance said, and it wasn't a fixed amount). If your whistleblowing resulted in an unfair dismissal (which I am assuming it did given the amount of the award) the statutory cap does not apply though. So the guidance should apply anyway in this case. But the guidance doesn't generally cover any other cases - tribunals may gross up, but nothing says that they must. It's sort of a "ought to but don't have to" situation.

The problem that I foresee, as I mentioned, is that I am not sure you can appeal. As far as I know, the only appeal route is on a point of law, and there is no law here to appeal. Since the date for a review of the judgement has passed, you may have missed the boat on that one. But this isn't a common question, and it isn't a common award - I am afraid that much as I would like to be able to offer you more, your query has gone past the limits of what I can help with here. It really is a matter the solicitor should have dealt with, as far as I can see. But don't take that as gospel - I can't say that it was something the solicitor could have done anything about, but on this matter I don't know. I am just applying logic, and logic suggests that the solicitor should have asked for a review of the award judgement.

tonyfaestoney

Hi there,

I totally agree with you. When the judgment was made my solicitor was on holiday for 8 days. I tried to seek clarification when she was off but told to wit for her return.

On her return I asked the question and she said she would ask the Tribunal but no response as yet. I have asked that she chase again this morning.

My gut feeling is the judge has forgotten or made an error and not clarified who has the tax liability, or he should have grossed up.

I know it is a plentiful sum of money but his intent as I read it was for me to be awarded NET, so frustrating if any tax liability falls upon me.

Thanks for your help with this, sure I will get to the bottom of it eventually.