Is compensation taxable?

gravlax

An investment platform provided very poor service, there was no financial loss, but the service was so bad they made a goodwill payment. On a self assessment tax return is this to be included as taxable income?

kinger101

No.           

DullGreyGuy

Compensation as you describe it isnt taxable but any interest payment on compensation is... doesnt sound like there is any interest in this case but sometimes if it takes months/years to settle statutory interest is added on top.

If compensation was for loss of investment returns or something that itself would have been taxed had it been received as income then tax applies to both the compensation and the interest. 

Albermarle

gravlax said:

An investment platform provided very poor service, there was no financial loss, but the service was so bad they made a goodwill payment. On a self assessment tax return is this to be included as taxable income?

Out of interest how much was it? Usually around £200 seems to be the standard.

gravlax

£500. 

I can't find any guidance on this type of payment on HMRC website. If anyone has any links to a source confirming such payments are not taxable it would be very helpful.

Albermarle

gravlax said:

£500. 

I can't find any guidance on this type of payment on HMRC website. If anyone has any links to a source confirming such payments are not taxable it would be very helpful.

When I got a similar payment, it was sent by cheque. Never even crossed my mind it might be taxable and just stuck it in the bank.

kinger101

gravlax said:

£500. 

I can't find any guidance on this type of payment on HMRC website. If anyone has any links to a source confirming such payments are not taxable it would be very helpful.

It will be difficult to find anything because they will only really publish guidance on taxable income.