An employer’s payment of £200,000 was made “directly or indirectly in consideration of, or otherwise in connection with” the taxpayer’s employment, and was therefore taxable subject to an exemption for the first £30,000.
The appellant's employment was terminated in March 2010. He received statutory redundancy pay of £10,640 before the end of 2009/10.
Following his dismissal, the appellant commenced proceedings in the employment tribunal, alleging unfair dismissal and age discrimination. Following mediation, the appellant’s former employer agreed to pay him “an ex gratia sum of £200,000 by way of compensation for loss of office and employment.”
The appellant completed his 2010/11 tax return on the basis that the payment should be tax-free. Following an enquiry, HM Revenue and Customs (HMRC) concluded that the payment of £
