Declare settlement compensation plan.

Pabloholmes

In summary I breached contract with my ex employer and received a loss of office tax free payment of 30,000 UK pounds as a settlement.

This was paid and not on my p45 or payslip. I was taxed on the the remaining 32000 as this was for holiday, wage and car allowance.

Regarding the untaxable element I don't believe I need to declare this as it was a loss of office compensation payment thus void of tax?

Is that correct or does it need to show on my self assessment and if so why?

uknick

Just to be clear; you broke your employment contract and they paid you £62k?

Pabloholmes

Yes. That's what happens when you treat an employee badly and would rather settle than goto court.

uknick

Pabloholmes wrote: »

Yes. That's what happens when you treat an employee badly and would rather settle than goto court.

So, they broke your contract of employment, i.e. you were blameless in the circumstances surrounding your departure.

If the £30k payment is an ex gratia payment (which it seems to be as the other £32k seems to cover payment in lieu of notice and other lost wages), then it doesn't need to be declared in your self assessment.

Pabloholmes

Well I think whom broke contract is contentious. I broke it the moment I didn't work notice, they broke it the moment I deemed it appropriate to not work notice thus we settled via agreement.


Then the settlement was taxable wage, perks etc (32k) then a lump sum loss of office/compensation at 30k.


The only thing on my payslip and P45 was the 32k taxed wage.