Unfair Dismissal Settlement Taxable?

Treacle_2-2

Can anyone tell me if a settlement received for unfair dismissal needs to be included in the self assessment - I guess so but not sure where to put it!

Murtle

I thought it was tax free up to £30,000? or is that only if it follows redundancy??

sorry not helping am I??! ;-)

Hope someone can come and clear it up for us!

sarahlouise210

Up to £30,000 of any compensation payment can be made to you without deduction of tax as long as it is to do with the termination of your employment - this includes unfair dismissal payments. There is an exception though..... if your contract of employment stated that you were entitled to a right of compensation if you ceased to be employed or in lieu of notice then the amount will be taxable whtever the amount. There is a specific box for redundancy payments etc (cant think of which one off the top of my head) You declare the amount received in one box and claim the up to £30,000 excemption in a further box thus cancelling out the payment received. You will find it on the employment page of your tax return.

Debt_Free_Chick

I'm confused .... is this a payment awarded by the Court for Unfair Dismissal? If so, that payment is a legal remedy (damages) for a wrong and doesn't get put on your SA form.

Or is this a payment that your employer made for "loss of office". If so, then tax, if due, on any payment in lieu should have been deducted by your employer. Of the balance, first £30,000 is generally tax free, but you have to put the whole amount on the SA Form.

Can you clarify how the payment arose, so we can be precise?

Treacle_2-2

Thanks for all your help – this is the story….. My dad had a serious op last year and had to be off work for a 5 weeks (I think it was!). Within 3 days of him being back he was told he was no longer needed as they had coped without him. His position was Maintenance Manager at a hotel and he knew the areas of his job required by law were not being adhered to (fire alarms, clargester, & various other things). Thankfully the case was settled just before it reached court. Hope this helps to clarify things.

Also a second question – can anyone confirm where jobseekers allowance is entered – would it go as another employment?

Thanks again everybody!

ctm_2

Jobseekers allowance goes on page 4, box 11.5, entitled 'Jobseekers Allowance'.

Treacle_2-2

Not so easy to find when doing it online – but I clicked on the right part eventually, thanks for your help :-)

So I just need help with the original question now.

Debt_Free_Chick

Treacle - the payment was compensation for loss of office. It needs to be entered in boxes 1.24-1.30.

HTH