Summary
A payment received by a former employee under a compromise agreement with his employer was held to constitute taxable income (subject to a £30,000 threshold); the expression ‘injury’ in ITEPA 2003 s 406 (‘Exception for death or disability payments and benefits’) was considered to refer to a medical condition, and did not include injury to feelings.
Background
The appellant was made redundant from his employment in March 2010. Following his dismissal, the appellant commenced proceedings in the employment tribunal, alleging unfair dismissal and age discrimination. Subsequent mediation with his former employer resulted in a compromise agreement, under which the appellant received £200,000 during 2010/11 in full and final settlement of any claims against the employer.
In his tax return for 2010/11, the appellant included £
