A compensation payment from the Post Office was fully taxable on a sub-postmaster (to the extent that it exceeded £30,000) and no deduction was due for a purported redundancy payment to his wife in respect of the sub-post office part of the business.
The appellant received a payment of £76,008 from the Post Office as compensation for the loss of his office of sub-postmaster. HM Revenue & Customs (HMRC) assessed the payment, to the extent that it exceeded an exempt amount of £30,000, to income tax for 2004/05 under ITEPA 2003, s 403.
The appellant appealed against the assessment. His case was that the taxable amount should be reduced by a deduction in respect of a redundancy payment made to his wife of £37,122, and by certain costs of removing fixtures and fittings associated with the Post Office business.
The appellant ran a newsagents’ shop and sub-post office in
